AIBU re HMRC

[Taxpanicmum]

DP did his self assessment for tax a few days ago. This is the one he does on top of his PAYE. This morning he has received by email a notice to say he has 'underpaid' tax by 10k and that they are adjusting his tax code to reclaim all of this 1k a month ( hahahaha hysterical laughing!!!)

He is absolutely livid, he is scrupulous about informing them of all his income/ changes and gets updated page coding notices two or three times a year and is never in arrears. There is nothing he has omitted to declare either this year or any previous years and all of his changes have been double checked by the company accountant.

DP is now saying he will close his business making 40 people redundant as quite frankly we never have any bloody money anyway and living with the uncertainty of the tax man coming knocking is too much, I have been sitting here in tears!

No point ringing them as apparently they basically never answer the phone. So we have to wait until the PAYE coding notice comes whenever that may be and just sit panicking until then.

Hmm, well she did say that it didn't give a breakdown but an overall amount.

I do trust that she's sensible enough to have called the HMRC's official helpline number and not the number from the email?

It does sound a little odd and I would be investigating further before making any knee-jerk decisions based on an single email. It does seem to be a high amount for them to send an email over.

I operate as a limited company, I have zero employees and my accountant deals with all of my tax affairs. He saves me infinitely more than he costs me in time and money. There's no reason anyone should have to submit any returns themselves, corporate, personal or otherwise. Even if your DP is meticulous and completely transparent in his returns, they're an utter minefield and if he's working ridiculous hours and totally strung out, errors will inevitably creep in.

I also second those who a questioning the validity of the email, even in light of the OPs recent post (and even GrandadGrumps knowledgeable post). I have also HMRC to be efficient and helpful every time I've had to contact them.

Also, I'm agog at a company employing 40 people being so close to the wire that the prospect of paying a 10k bill in installments would necessitate widespread redundancies. This is just the straw breaking the camel's back, isn't it

OP try not to panic. The business is obviously wildly out of control. It's likely to be a pretty shitty time from here on in but if you remain strong can minimise the fall out from this. You'll get through it, he's done it before he can do it again, albeit with a more streamilned business model and an accountant overseeing all his tax affairs.

Hi Vivipru

the company is not operating 'close to the wire' far from it!!

The company runs with plenty oif finsacial reserves and no debts, and DP could take large dividends if he so wisehed, but he values the financial integrity of the company and chooses not to do this unlike many other Directors of medium sized companies. The suggestion that he might close the buiness is that he could walk away set in a very comfortable positioin, with no money worries and no 60 hour week. Unfortunately what would need to happen is that a larger competitor would likely buy the company out and that would inevitably result in most or all of the employees being laid off, as this is generally how buy out go in his field.

The overall situation is just very frustrating and it makes you question whether there is any real 'ppoint' to keeping it all going.

How are you sure this email is real if you haven't managed to get through? Have you looked at the link on page 2? I have never had a genuine email from them (I have had scam ones however and fairly frequently!) and they have assured me that they do not send emails. You are not ringing the number on the message are you?

I've never known HMRC communicate by email unless its a PAYE coding notice, £10k is too high for being adjusted by PAYE code and your husband needs to speak to his accountant if he is drawing a £50k salary as it is not the best way to extract income from a limited company. I'm an accountant and our Limited company fees include completeion of the directors tax return. I suggest your husband speaks to his accountant, even if there is a small fee it'll save him far more than that by getting the correct tax advice.

what to do about underpaid tax

How do you know it's "genuine" if you're still waiting to get through, op?

I don't think it's genuine either. They may have got hold of some genuine information, maybe. But HMRC would not do this by email.

If the business owes tax, fair enough. Presumably your last tax return had an amount for payment on account for this year, where you paid what you guessed it would be. The £10k ought to be the sum of (any underpayment for this year)+(what you think you will need to pay as you go to cover next year's tax bill on the business). Maybe they haven't taken off what you paid in advance last year?

Anyway, surely the accoutant knows exactly how much is owed? and surely your DH saved up the tax due on the business profits during the year, so he had it ready?

I have worked for HMRC in the past. I've just texted and asked an ex colleague I'm friendly with to check nothing has changed. This is not genuine.
And the OP will not be able to discuss her husbands tax affairs unless HMRC have received written permission.

OP. Im an accountant.

I can guarantee you that there is no way HMRC would email him re his tax affairs. They are not allowed to.

If you have had an email it is scam.

Your DH sounds like he has a very poor accountant and an even poorer grasp of business if he is running a business that has no debts, pays little dividends to him and a £10k bill can leave you in tears.

As a small business owner I pay myself about 7k pa salary and the rest as dividends. You pay 0 or is it 10% on the first 40k divs I think, so definitely better than paye. Also if the company has money, just pay a dividend today and settle with hmrc using it. You would probably pay the tax next Jan (depending on your accounting year?).

And if he is wanting to sell the co you want to transfer a cost, salary, to a post profit payment like dividend

Anyway as a successful small business owner, 10k is not a vast sum. I do wonder if the op has all the info.

OP I don't understand why you aren't acknowledging the many replies that tell you that HMRC don't communicate via email and that this is probably a scam.

They do send notice of tax code changes to employers by email, and then the employee gets the detailed version by post

If the amount of tax was £3k, then for a 40% taxpayer, the adjustment to the code would be £7500 (so that he would pay £7500 x 40% = £3k more tax over the year). Usually this would be collected over the next tax year though, starting April 2014. Anymore than £3k has to be paid in full straight away.

Are you sure he put the amount of tax already paid correctly on his SA return - my DH forgot to enter this figure one year and got a demand for a huge sum, but it was sorted out by a phone call!

They do send notice of tax code changes to employers by email, and then the employee gets the detailed version by post

Sorry I wasn't aware of that. Consumer affairs programs are always reporting about the fact that HMRC do not send emails. Maybe it's changed.

That's been the case for a long time now, fireside. I think when they are warning of scam emails it's to the general public, not companies.

OP - stop crying. Tell your husband also to stop throwing strops.

How about looking at the sums with the accountant and seeing what the actual situation is?

HMRC do answer the phone but they are understaffed and January is very busy as there is a deadline coming.

That's been the case for a long time now, fireside. I think when they are warning of scam emails it's to the general public, not companies.

Thank you for clarifying that. I was forgetting that companies may be treated differently to the rest of us.

Hope you get it sorted soon OP.

HMRC do not send tax demands by email.
If you have an accountant, why is your DH doing his own SA return in January?
Why had the accountant not checked all the figures months ago?

Coding notices DO NOT come out by email
notifications that they have been issued and are checked online

I've been an accountant for over 20 years and deal with CIS / CT / VAT / SA

I've only had one genuine email from HMRC and it was a reply to one I'd sent to a senior officer

I work for my parents employer & we get numerous emails from HMRC informing us of tax code notices.

I do a bit of freelancing on top of my regular job and last year got a penalty notice for "not paying" - surprisingly my account was in credit by the very same amount I "owed" but it took them three months and a threat of being reported for harassment to sort it

I'm an accountant. It sounds like your DPs is crap.

OP - HMRC never never never never never email about tax payments - under or over. Just ignore it and wait for an official letter.

picturesinthefirelight
we get numerous emails from HMRC informing us of tax code notices
indeed,
you get notification that a coding has been issued
but the actual coding notice with taxpayer details will never ever come out by email

So is the OPs email a scam?