to not pay this bill?

[Muira]

I got a tax bill the other week that says I'm £300 underpaid in tax, i.e. I owe them £300. It is backdated to April 2009.

The national insurance number is correct, but it says 'amount earned in that period £8000', which is not correct.

Let me break it down for you:

April 2009 - I was a PhD student, not paying tax. My income was research funding that is not taxed.

As a student, I did two hours of casually-paid teaching for the university - not taxed as I was a student. It totalled £198.

I did some research with a colleague and was twice paid £1,000 through the university. Again, this was all paid into my bank account and legitimally and not taxable.

January 2010 to present - I earned £24,00 after tax in a one-year long university research post.

Basically, the only period I have been eligible to pay tax is January 2010 to present. Yet the notice is dated from April 2009. Plus, my tax was always taken off my salary.

So how can I owe them £300?

I can't get through to anyone on the phone, plus the letter says 'take no action before 31st December 2010'. I'm only dealing with the letter now as I've been quite ill for a while.

Any advice hugely appreciated! I might not be at the computer again today so apologies for ignoring your messages!

P.S. I stopped being a student after graduating in November 2009 and was unemployed between then and January 2010, just to clarify.

Don't just ignore it. Try calling again (try calling first thing in the morning). They might be shut over xmas but try calling again next week.
If you can't get through, write them a letter disputing it. If you go on Directgov there is guidance about how to dispute tax bills.
HMRC probably has guidance too.

I'm sure you'll sort it out but don't just hope it will go away is my advice!

I'm not sure re your student status, think you're just going to have to persevere with getting through to someone.

However was just going to say that tax years always run from April, so that bit isn't odd. Maybe it's to do with a possible underpayment of tax on your new salary from Jan 10?

Not a tax expert but I expect that you owe it because they calculate it based on what you earn in a tax year so here 6 apr 09 - 5 apr 10. If in that year you earnt more than the tax free allowance you will need to pay tax on the excess. As you started your paid job in jan 10 then the first few months of that will count within the tax year so although when you earnt the £198/£2000 as a student you weren't earning enough to pay tax over the whole tax year you were and therefore you have to pay it now. I got caught out with a similar thing! Does that make any sense? When you get through to them they should be able to explain it.

Thanks so much everyone - I honestly won't ignore it, admittedly my OP title was a bit provocative so that people would come and advise ('tax bill' sounds too dull a thread!)

Lindsell that's really helpful, and I'm sorry you got caught out. I will look at directgov and send a letter.

I guess my status as student one April and employed the next does mess up the tax year. After being a student for 10 years and new to real employment I am so confused!

Tax year runs from April 09 to April 10 so if you earned say 24000/3+2000+200 ie £8200 (plus any interest on bank accounts, shares etc), you then deduct the personal allowance of £6475 and pay tax on the difference. It is perfectly possible that your employer assumed that you had previously no income for the tax year and therefore you were taxed on paye as if the previous earnings did not exist and are now liable to pay on the unaccounted for £2200 (some of which may still fall within the allowance).

Hi It sounds Like you have been taxed on a "bursary" either write or phone,you will be able to contact them every day bar xmas day.If you look at the paperwork it probably says the tax owed will be collected via your tax code starting next april,so you have plenty of time to sort this out so dont pay anything until you are crystal clear of how any tax owed has been calculated.