Can HMRC do this?

[violathing]

Basically they are saying DH underpaid income tax in 1996/7, that's 15 years ago before we even met. The amt owing is £405 but have doubled ot cos of interest. Is it reasonable to chase such an old debt that he has no knowledge of. As far as DH was concerned he was PAYE but it transpired during a phone call that they have SE & Pension income from that year. Why wasn't it pursued sooner? It is ridiculous this far on as we cannot really check the information properlry the employer he worked for has ceased trading

It is very unusual to get a demand from that far back. As far as I know 1996/97 was when the current system of self assessment was first introduced.

According to current rules HMRC can go back 4 years if they discover a discrepancy (6 years if the person was preparing SA tax returns) but can go back up to 20 years if they suspect fraud. So, in theory, they can chase for debts in 1996/97 but they have to think there's fraud involved.

If he was self-employed did he prepare accounts and notify HMRC (was Inland Revenue at the time) of his income? If not, I suppose HMRC can claim that he fraudulently didn't disclose all his income. However, it's very unusual for them to go back 15 years to claim £400 - which to them is a very small amount of money.

If your husband did give details of all his income at the time but HMRC failed to collect the tax you can claim relief under ESC A19. It basically means that HMRC had all the information at their fingertips and should have acted at the time, not chase you for it years later. This applies, for example, where you have multiple employments but not enough tax deducted. Because all employers submit year end returns HMRC should know how much you got paid overall and therefore there is no justification chasing for that money 5 years later. However, if your husband was self-employed and never told HMRC about it I'm not sure this argument applies.

As far as I know, there is no time limit on the repayment of underpaid tax. If he calls them, however, there may be some discretion on the interest and they might be able to claw it back through his tax-code rather than as a lump sum.

He was not SE although he is now he was PAYE for an engineering company no longer trading. Could he be mixed up with someone else?
How do we get a detailed explanatn from hmrc? Can we make an appt to see someone face to face? Their helpline is not very helpful at all. At the very least we deserve this as we have no idea what their info relates to?

How did HMRC advise you of this tax error?

They should give you the information although getting someone to talk to you about it is a challenge. I would write them a letter, not call them as the call centre employees have no idea about tax matters - they only read things off their screens.

In the letter I would put that your husband (refer to full name, NI number and, if possible - home address in 1996/97) was employed by XXX (the employer's name) under PAYE and did not have any other income in the tax year. Or, if he did have some other income, give those details as well. If you happen to have a copy of his P60 or payslips from that year attach those to the letter as well.

Finally ask for explanation as to what untaxed income he had according to HMRC.

Writing a letter has two advantages:

1. there's a written record of what information you've given them and are asking them; and
2. somebody who actually knows something about tax law will look at the letter.

The downside is that they will take a long time to answer - 2-3 months is not unusual.

I can't believe it has twken 15 years to come to light! is it because during the good times they did care about small amounts and now the take is down thwy are looking foe every penny?
Surely we cannot be expected to have records from then, cetainly have no P60s or payslips. I guess I agree that we should pay the tax if is short but interest for 15years?

Did HMRC write to you? I'm currently being chased about a discrepancy from 2010/11 and it's very detailed as to why and there are very clear contacts and deadlines. I'm asking because there are various 'HMRC' style scams about, mostly sent by e-mail.

no a letter has arrived on genuine letter headed paper, not very helpful just a vague statement with no detail at all. If we go to our local office will someone see us to go through it or would we be wasting our time?

Call the number on the letter and ask for the team that sent it. They should, at the very least, be able to give you a full statement and you should also be able to ask for an interview.

I think that you should write to them as riksti suggested, with as much detail as you can give for the tax year in question, and ask them for a complete computation of how they have arrived at the figure demanded.

They can be a bit reluctant to provide this, but the advantage is, it is dealt with by a higher grade officer, not just someone sending out a standard reply, and although it takes some time, it is worth it.

I've had to do this in the past, and as soon as I saw their breakdown, I could see where their error was, and saved myself some hundreds of pounds, so it was not a waste of time for me.

WHat I don't understand is why they are going back so far? 15 years is ridiculous? How can any lay person be expected to know info from this far back?

we will draft a letter and send it recorded delivery asking for a full explanation

Phone the tax office to verify the letter as genuine. Don't use the phone no. on the letter as that might not be genuine either.

Just to say that riksti's advice sounds good to me.

Unless they are asserting that your DH was acting fraudulently they have no business making assessments going back 15 years.

Does your DH have any idea at all what this self employment and pension income could be? Did he have any other source of income apart from his employer? If not it is hard to see how they could recover the money from him. Hopefully you will get more information in response to your queries.

If you do feel out of your depth and can't afford to pay for advice, these people might be helpful:

taxaid.org.uk/

They have already taken the money. He is SE and was dur a refund from CIS decuctions of approx £1000, so they have deducted from this. They seem to do as they like really. It was only when we queried the amt refunded that they told us about this deduction. A letter in advance would have been nice!