To cancel the holiday?

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We had some money come our way and planned a new kitchen plus 2 week holiday.

For what ever reason the tax man has been in touch and we now have a £8k tax bill (wrong tax code, no self assessment for a few years etc)

The tax has to be a priority and the deposit is paid for the holiday plus kitchen ordered and start date arranged.

To be able to finish the kitchen properly inc decorating, new table etc all the extras that will come with it being amazing I think we should cancel the holiday, lose the deposit but then pay the tax owed and finish the kitchen properly.

Other idea is to pay the tax bill, balance of the family holiday and spends and have a kitchen that isn’t finished and no extra money to do so till this time next year?

What do you mean by no self-assessment for years? Are you self-employed and hadn't paid your tax bill?

I'd prioritise the tax, then the kitchen, then the holiday, in that order.

Could you live with an unfinished kitchen for over a year? I really couldn’t, it would do my head in. The holiday will have been and gone in 2 weeks!

It’s my DH, he has been with the same company for 10 years plus and was apparently told a few years ago he didn’t need to self assess...

We agree, tax, kitchen and then holiday, we can’t afford the holiday if the kitchen is done properly

Maybe ask if you can carry forward the deposit to next year for the holiday?

If it’s just decorating and a new table I’d pay tax, go on holiday and buy the kitchen extras over time.

If employed your DH should be on PAYE, wrong tax code is their fault and can be adjusted, I don’t think you will be required to fork out £8k in one hit. That aside I’d ditch the holiday

As you’ve already paid the deposit for the holiday and it’s a shame to lose it, would it be possible to pay the balance on a 0% credit card and repay over a year. Then use the cash you have now for tax and kitchen.

Check if the tax bill is right and whether you can pay in instalments. Cancel the holiday, after seeing if you can carry the deposit forward for a future holiday.

We had to lose a holiday deposit once, due to unforeseen circumstances. We got over it.

I think you can call HMRC and arrange to pay in instalments, doesn’t necessarily have to be in one chunk. Worth a call, and say difficult to pay all at once can you work out a repayment schedule? The tax man would rather have the money over time than not at all

Id get the basic kitchen done, wait for the new table etc and have the holiday you've already put money down for.

HMRC don't always see their mistakes as their problem! But it is worth discussing whether the money can be paid back over a period. I have underpaid (small amounts, wrong tax code) and they just take it back over about a year. I guess your dh must have some additional income that he should have been declaring through a self assessment. But money coming your way? Make sure that the tax you are being asked for is correct - they make loads of mistakes.

Decorating and a kitchen table can be done for £100 on Facebook selling pages/ cheap paint and diy. I'd not forgo the holiday.

If your H was employed by this company, paying tax, NI etc then unless he has another income stream where he isn’t taxed at source, why is he now being asked to self assess? Has his employer being paying the wrong amounts?

Tax, kitchen, holiday- in that order. Contact the holiday company and see if they’ll give you a voucher for the deposit to use against a trip at a later date. I did this when I had to cancel a ski trip due to pregnancy.

I'd go on holiday too if you are talking about not getting a specific table and not finishing the decorating.
If you are talking about not having any cupboards , sink, or white goods, then obviously you need to prioritise the kitchen if it has been ripped out (or, f not started, do that next year). It seems a shame to lose the deposit on the holiday.

Definitely ask HMRC to take instalments- make sure instalments are easily affordable, and start lower than you think they will take. They might surprise you.

Wait wait wait. Don't just take what the HMRC say as the truth. They tried to take my partner for £20k he didn't owe. After many wranglings with his super tough accountant, they've just paid him £2k. Don't just accept it, get yourself a decent (and tough as shit) accountant. The HMRC have tried many dirty tricks to get the money from him...many, including down right lies.

Is your DH a high earner, who should have paid 40% tax on something he has paid standard or no tax for?

Has he had a lot of other income like interest, dividends or has he had benefits like a company car that hasn't been reported to HMRC.

Have they explained how they have arrived at the £8k and do their figures look plausible? Are there fines included or is it just unpaid tax. Or has your DH been part of a slightly dodgy tax avoidance scheme (including pretending to be self employed or using umbrella companies, which is rife in anywhere that involves agencies like construction and supply teaching).

As others have said, HMRC do make errors so it's always worth double checking what they tell you. And talk to an accountant if you don't understand the figures.

I would take the holiday, dispute the tax but try to pay what is owed in installments and do the kitchen as and when or scale back as necessary.

What's the percentage of the kitchen budget is the £8k? Obviously if it's a £10k kitchen it's impossible to start it without most of the budget, but if you would still have £32k towards a £40k kitchen there should be plenty of scope to scale back until you have all the money.