To be so annoyed at the tax office?

[sugaryouth1]

My husband has some unpaid tax to pay. It's 500 pounds. It's money we just don't have to hand. It's a lot of money so he rang them. After an excruciating wait on hold for over an hour we finally got the most unhelpful woman ever.
First the type of tax it is means he can't just pay it out of his wages, it has to be done via a bank transfer
Second problem is they don't take credit cards, only corporate ones. We have a credit card and while not ideal to use I'd rather it be stuck on that but no they don't accept them.
So we tried option 3. A payment plan of some kind. That was a flat out no.

So what the hell do we do? We don't have 500 pounds. We barely have 2 pounds once all the bills have gone out. Plus we've just received all our bills for the next financial year. Everything's gone up but our wages certainly haven't. We've already got to find an extra 150 pounds a month just to live plus our mortgage term ends in November.

So the call ended with a warning of it needs to be paid by April.
And no we didn't know he wasn't paying enough tax. It looked OK to us and it's not something either of us are very knowledgeable about.

There's literally no incentive to work or even try anymore

Can you take a cash advance on the credit card?

Not ideal but can you put other bills on your credit card and use the money for the tax bill.

I’m surprised do be honest because they’ve always been really helpful when I’ve phoned (not about arrears through).

I wonder if it’s worth phoning back to see if you get someone more helpful.

I hope you can get sorted. It’s always such a stress dealing with the tax man

Why does he owe the tax specifically? Is it a payment on account? If so you can choose to reduce these.

So what sort of "extra tax" is it ?

You must have had income associated with that tax or some sort of benefit if it is not paid out of wages directly.

I don't know about non tax payment, but I thought what they do is just add interest to the amount. So it may be that that interest is cheaper than using credit, and you can go past the April deadline, just with some interest to pay. I would check this though because I don't fully understand how it works.

Yeah I might have to ring them again. We've been ringing them pretty much non stop since the letter arrived but getting thru to an actual human is near on impossible. I'm surprised we managed it to be fair.

Not too sure if we could stick all the bills on credit card. Everything is direct debit so its a massive faff to change everything. And then resetting it. Have never looked into a cash balance from the credit card. Its a very very basic credit card but I'll have a look.

Just having an awful week and this is like the kick in the teeth to top it all off

@GasPanic it's income tax from the financial year of 2021 to 2022. Letter arrived this month.

OP can you give some more details about why the tax is owed? Is he freelance?

@cloudyskye it's income tax from the year 2021 to 2022.
The letter states according to their records he owes them 500.50 pence for that financial year. Then there's a massive breakdown of how they have worked it out.

Have you tried setting up a Self Assessment payment plan online?

https://www.tax.service.gov.uk/pay-what-you-owe-in-instalments

If you call first thing when their lines open you usually get through fairly quickly. Also they absolutely do offer payment plans for those who have difficulty paying, so push that if you get another unhelpful one.

But is that through self assessment or PAYE ?

Do you do self assessment ? And if so as someone says, it could be payment on account. You can reduce these payments I think.

If you are within the PAYE framework it should all be taken care of for you, unless you have P11D benefits with tax implications ?

It's important to understand where it is from because sometimes HMRC do get it wrong.

@GasPanic we've never done a self assessment so I assume thru PAYE. I'm not going to lie, I really really do not understand any of this stuff.

An underpayment of PAYE would usually be collected via tax code in the following year. So it is not clear how this could have only arisen now, can you explain any further.

How much do you spend on groceries and petrol per month?

Could you put next month’s spending on a 0% credit card, pay the £500 from your income and then set up the payments to the credit card to pay it back over the term of the 0% offer?

That’s what I’d do.

Then get DH to triple-check all his self-assessment figures and make sure he’s saving enough for this year’s tax bill.

@NoSquirrels we don't drive but we buy a monthly bus pass each. We spend about 190 on travel a month, maybe more some months depending on our work shifts. Food is around 300 a month. I'll have a look into a 0 percent interest card. Ours does have an interest fee which is why we rarely use it

Insist on a payment plan they will eventually accept

Go and see your Mp. They can help with this kind of thing

Well some possible scenarios :

a) Your employer screwed up the PAYE amounts, which as someone else said, they would probably pick up the next tax year.

b) You had some taxable benefits and that is the tax you need to pay on them (private med may be an example) - you get details of these on the P11D. I don't know whether these are normally picked up through PAYE or self assessment.

c) Maybe you did something like stop paying into a pension, and you were given tax relief on that money that you shouldn't have had.

d) You had some undeclared income that somehow HMRC found out about and now want paying for/declared.

e) You switched jobs and they didn't get the tax deduction right.

Anyway, I am sure you will be able to talk to someone and come up with some sort of payment agreement/they will tell you what the penalty is if you overrun. I think the interest rate is 6.5% atm, which is not usually as much as credit cards etc. If they sent you a letter there is normally a contact point on it.

No expert but I also thought you'd pay at source - extra tax payments going forward over a year until paid.
Failing that offer to pay a small amount- say £50 initially.
Basically make up your own payment plan.
And pay off abit each month.
this shows willing and usually they would rather have that than nothing.

If you've never done a self assessment (and if all of your income is through PAYE, i.e. no other sources of income other than your salary from employment and you don't earn over a certain threshold - I can't remember what the threshold is but I think in the region of £125,000, then you wouldn't have ever needed to do a self assessment) then if there is a shortfall it sounds like your employer (or rather, your husband's employer) has made a mistake with his payroll. Or HMRC have made a mistake - it should be extremely unlikely for someone who doesn't need to do self assessment, whose only income is taxed via PAYE, to be left with an amount owing to HMRC. If indeed it is due to a mistake by his employer, to the extent an amount owing needs to be paid back in a lump sum which would leave you in hardship (and it sounds like it would) then his employer should pay it. I once successfully challenged a very similar scenario and got that outcome.
If it's due to a mistake by his employer and would require you to incur debt to pay it then even more reason the employer should pay (you shouldn't be penalised by having to additionally pay interest on debt incurred to pay it).

Whatever you do, please please don't take out a cash advance on a credit card to pay it as credit card companies charge even higher rates of interest and from the day you withdraw the money on cash advances than they do on purchases.

Good luck OP.

Ps just to second frustrating though it is, I would also advise to keep ringing HMRC as in my experience I found you get a different answer every time someone different picks up the phone (which doesn't exactly ever fill me with confidence they're giving me accurate information) but hopefully you'll be able to eventually speak to someone more helpful than that last person.

This really doesn't make sense. It it's a shortfall for a previous tax year and you earn £100k PAYE so have never done SA, HMRC should adjust your DHs tax code for the following year to recoup the shortfall. They usually do this automatically, I've never seen them demand payment upfront.

Not too sure what the tax is but you could propose the Time-to-Pay option. HMRC are usually very reasonable and if you haven't got it, you haven't got it and you simply swallow the small penalty which depending on the type of tax can be 2% of the £500 16-30 days rising to 4% on day 31. Much better than a credit card. Least gives you a bit if wiggle room?

Earn under 100k**