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HMRC - feeling bullied and pressurised. Can they do this?(42 Posts)
Two weeks ago DH received a letter from HMRC saying that he owed a tax payment of £3800 (this is in addition to the normal tax he has paid for the year)
He has just spoken on the phone to HMRC today (he has been out of the country for last week) and they have confirmed that this is the correct amount.
The reason for it is that DH was made redundant the year before last and his company basically messed up his redundancy pay when calculating the tax he owed.
HMRC are saying that we have to pay this amount immediately, that it can't be collected from his salary each month and nor will they agree to us paying this off in instalments? Not only that but the debt is now accruing interest
DH tried to argue that this isn't an amount we can simply 'find' from thin air but they were having none of it. They said we would have to borrow money from friends or family or sell the family car, did we have any expensive sports equipment etc [cross] and they then advised him to get a loan or use a credit card!!!
We are not disputing the tax bill at all and nor are we refusing to pay it but given that the bill exists through no fault of our own - can they force us to pay it immediately?
I have no idea where we are going to find this money. DH is now thankfully back in work and don't get me wrong, we are doing 'ok' financially but his previous redundancy depleted all of our savings and we have no assets to sell. I'm bloody well not going to sell the family car, it's only worth about £400 anyway!!
Is there some way we can appeal this, or complain? Has anyone else been in this situation before?
I've not heard of them refusing a payment plan before, this seems a change in their practice of ensuring they get the money back through monthly installments.
I'm sure you can appeal, does it give details on your letter.
I hate them!, they still owe us a substantial amount owed from the middle of last year and all we get from them is it's in the system and you'll get it in due course.
I don't have any experience of this. My inclination would be to stand firm. Just tell them the truth - you cannot afford it, and the fault was not your own anyway. Tell them it's a repayment plan or... a repayment plan.
I would first ask them for the paperwork relating to this - ask them to prove to you how the tax is owed. Check it isn't a mistake on their part.
In surprised they won't take instalments and I'm surprised about the interest. I owe £5900 from years ago and am paying it back interest free at £10 a week
My DH was presented with a bill for £8k of tax underpayment because his employers made an error with his PAYE over a number of years.
This was a big shock and after many many frustrating calls to HMRC he got his tax code adjusted and some interest free loans to help him manage the payments.
None of this was his fault but they have now insisted that he complete a self assessment form every year and they have just written to say that they are going to tax him at 45% because they are assuming he is gong to earn £150k this year!
It's a joke really as he actually earns £70k p/a. We are feeling really bullied by them at the moment and its really hard to get through to them on the phone.
I hope you can get something sorted out soon.
Talk to an accountant.
I had a debt of 8 thousand or so with them. They scared me so much that i was having nightmares and panic attacks. Then I spoke to an accountant who advised me clients of his with far bigger debts over hundreds of thousands have arrangements to pay in instalments. They will scare you and be insistent because it's their job to get the money.
I rang up and asked to be transferred to someone who could help, tooka while of repeating myself assertively, continually staying my willingness to pay but my inability to do so in one sum. I even at one point burst into tears ( genuinely) and told them if they wouldn't help me i'd go bankrupt and they'd get nothing. Finally transferred to the department that I can't remember the name of, but it's something like debt department. Chatted to them about my incomings and outgoings and agreed to pay £100 a month. Then sent them a letter detailing all my incomings and outgoings, they sent me confirmation and I set up a standing order. Not hard from them in a bad way since.
Don't let them scare you. A good accountant would speak to them and negotiate on your behalf
you must write - make it recorded.
go through appeals process
get a senior managers contact.
write the same letter to 5 people at least. make it short, to the point and put an expected date to answer on the form. don't be sarky or flip. state the facts - don't tell them about your dead cancerous dog or your one eyed baby triplets. they don't care
think about their drivers. Someone above is pressuring them to get the money in, whatever you say isn't going to make a difference. the only way you can circumnavigate them is to know the RULES. To encourage you to take out debt is irresponsible if they do not know your circumstances, but is this stated anywhere in their rules, code of conduct, best practice documentation, mission statements etc? if not then it might be a good point but not one they are going to recognise.
there must be tax lawyers who do free half hours? worth a few phone calls.
Found this for you Betty but don't know how much it will help.
Have you thought about speaking to your MP? It is not something I would normally do but this seems so outrageous! I am not sure if they could help but perhaps it is worth a shot.
Lodge an appeal in writing and go to the CAB ASAP.
Oh and ring them and ask for the data protection address so that you can write and request all the notes from the phone calls you have made where they have refused to negotiate a reasonable payment plan.
Short answer is no, they can't do this, particularly as the mistake was not your DH's.They should not be charging interest as you did nothing wrong. And you can't be forced to pay immediately. For PAYE people, tax underpayments are normally dealt with in installments by changing your tax code. As said above, write, use their complaints procedure and if they don't back off, use the CAB or an accountant. But they should back down without too much difficulty. And double-check the calc, just because they say it's owed doesn't always mean it's true. Possibly talk to the payroll department that made the error, to get their understanding of what happened.
I'm no expert on tax but from the advice I linked to
'Freezing of interest
HM Revenue and Customs cannot agree to freeze interest on the tax, so as to help you to clear the debt. HMRC is obliged by law to charge interest.'
I work as a chartered accountant but its generally not worth us getting involved in stuff like this. If you are in agreement with the amount due then offer to pay a reasonable amount per week/month and (important bit) send in a cheque for your first installment with the letter rather than waiting for agreement. If you don't pay all of the debt at once then worst case scenario is that HMRC would take you to court and a court is likely to let you pay in installments anyway. If you had already offered and paid some of the debt off in installments then the court wouldn't look favourably on HMRC.
The amount you offer to pay as installments has to be realistic based on your income and level of the debt. eg. if you're a millionaire theres no point in offering £1 a week but if you were living on the breadline £1 a week would be reasonable offer. You need to get somewhere in between.
Put it in writing, ask them to prove it, use their Complaints Procedure.
Make sure you ask for an instalment plan and time to pay.
If none of that works take the matter to the Adjudicators Office who will investigate on your behalf.
This will take a long time and be very stressful. I have done it and had my complaint upheld.
Offering to pay something and being reasonable is also a very good way to get the Adjudicator on your side.
I would ask for them to provide evidence for this, and I agree on getting professional advice. My colleague was told by HMRC that she had underpaid around £3k worth of tax, they were going to audit all her tax returns for the last 6 years (implying that she was deliberately evading tax) and demanding payment. She questioned it and asked them to evidence it and it turns out after months of wrangling that they had basically made a miscalcuation and she didn't owe them, they owed HER. Originally she was just going to pay.
From what I've seen on HMRC forms for overpaid/underpaid tax, if your tax is paid through PAYE and calculated by your employer's tax department or HR department (not you) and they get it wrong, the company is liable, not the individual.
HMRC got a lot of shtick about a year ago for getting millions of tax calculations wrong, so they're being more aggressive about it now.
Thank you so much everyone, this is really helpful.
I must admit that we haven't checked their calculations, we are taking their word for it so it might be worth asking for calculations to double check.
Really good advice, so will pass this onto DH and get him to have a look x
and I won't mention my one-eyed baby triplets
If it was a genuine redundancy payment then it would normally be tax free up to £30K.
CAB are really useful. www.adviceguide.org.uk/england/tax_e.htm
They also have a downloadable helpsheet on income tax arrears which you can find by searching. Good luck!
They ALWAYS refuse a payment plan until they've come to visit. It happened to us, demanding we pay it all, and right now, and adding fines and interest each day. UNTIL we arranged a visit from 'who knows who' who went through ALL our finances with us in person, agreed that we couldn't get a loan/sell items to finance the bill and accepted that we couldn't afford to pay it all off in one go. This resulted in all the fines and interest being wiped, and a (Larger than comfortable) monthly bill until the debt was clear.
They are utter utter bastards. I don't see why the self-employed can't pay tax monthly like any other employed person. And yes, we 'should' put 25% of any money earned straight into a separate account as soon as we get it, but if work is slow or stops completely, you still need to eat and only a saint would leave their tax account and starve... much easier if we could just wave good bye to it and pay the taxman straight away. Of course, HMRC wouldn't earn so much interest if they actually made the system a little more user friendly so that won't happen.
Good luck op, some good advice here. You are not alone, you're not the first, it isn't 'fair'.
Rather than PAYE, self employed COULD pay into a PAYG account that cannot be touched by anyone other than HMRC. Perhaps.
Don't bank on being able to see anyone from CAB quickly, our nearest has an 8 months waiting list.
I thought underpaid PAYE was the employer's liability
Staff have been instructed to take a hard line on allowing people to pay in instalments because there is such a short fall of money being collected.
It's policy to refuse a payment plan initially in the hope the person who owes them will find a way..loan, credit card etc.
If you stick to your guns they will eventually accept a plan.
Blinking heck aldi- 8 months wait at CAB! It's a drop-in service here. I suppose it depends which part of the country you're in. Maybe OP will have better luck!
And I second that HMRC are bastards and arseholes. They forced my step dad into bankruptcy over something very like this. Instead of them agreeing to installments which he could have paid, they opted to get the administrators in and barely got back 5% of what he owed. One more small business closed, one more unemployed at age 60 in an area of high unemployment. Makes no sense.
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