Terrifying tax bill- advice please!!

[Goosegettingfat]

We have just received a (massive, unexpected) tax bill which we can't pay. It was due to a genuine error when DH did his self assessment. It's in no way deliberate tax evasion - anyone could understand how he'd got the wrong numbers from the wrong bit of paper and HMRC have acknowledged this. But it's left us with a £15k bill, plus they're fining us extra. I am not at all expert at these matters (and evidently neither is DH) but I think their bill is probably correct. Having said that, DHs employment history and consequently our finances are reasonably complicated.

So I think what I'm asking (apart from advice in general) is- would you pay a tax advisor just to double check it, or would you trust HMRC?

I don't want to throw good money after bad, because goodness knows we now don't have any spare money, and I have no idea how expensive a tax advisor would be, but on the other hand it's such a lot just to hand over and HMRC have chopped and changed all over the place with tax codes, new bills and rebates with us over the last couple of years. So I'd just like the security of knowing it's definitely sorted! Thanks for getting to the end of a tax question!!!

DH had this a few years back. HMRC were great- they waived the fine and allowed repayments in instalments.

Having said that, a meeting with a tax adviser would be a few hundred pounds and might save you considerably more. Depends how complex the situation is and what it would take for them to work it out (i.e. look over books or digging into invoices/receipts/bank statements)

That's surprisingly reassuring, thank you. Can I ask if the interest rate that they charged was eye watering? DH seems to think it will be but quite honestly I think he's just gone into panic mode!

I would deal directly with HMRC and ask what repayment they could consider. They’re not monsters, honestly!

DP has had something similar with rental income - hMRC made all the calculations and he agreed a payment plan with them. I'm not sure there was any additional interest although there was a fine for not filling in the form correctly and misdeclaring in the first place. They were surprisingly understanding - so I think they can tell what is large scale tax fraud / evasion and what are genuine mistakes. They didn't look to bankrupt or demand all the funds upfront either.

They are probably correct but try to negotiate installments. Depending on how complex it is (and you don’t say) it may be worth you double checking with an advisor, particularly if this issue may have been replicated in previous years (which HMRC may look into)

As PP said; they will definitely agree a repayment plan.

If you're querying it could you go to citizens advice and ask for help? They may have some one who can check the calculations and help you negotiate?

What is it?

Self employment where a tax adviser might be able to advise on some additional expenditure / allowances he hasn't claimed?

Or PAYE bonus type thing where's there's no 'playing' with figures?

Thanks for all the helpful replies on such a boring subject! There is some freelance work, where a tax advisor might be able to play with the numbers a little bit, but mainly they arrived at some incorrect tax codes (we're not sure how, it happened several times over the last few years) plus DH entered the wrong numbers for one year so he declared he was paid less than he was and that he paid more tax than he did and this and the tax code error caused him to be given a massive rebate (which we were delighted with as it was very needed at the time). Only, now they want the rebate back. And we spent it

Don’t trust HMRC, they often send estimates in the guise of actual bills.
Definitely get a tax advisor to check first then agree a payment plan.

I’ve had all sorts of self assessment “bills” thrust at me from HMRC and they are incorrect more often than not. So best to check the figure before paying it.

We can probably check it on here for youtoo if you list (with altered figures if needs be or rough figures) what was earned by each of you that year and from what source and what tax you paid. It is not that hard to get a rough idea of if a tax bill for a tax year is about right

The interest is statutory and won't be waived.

I assume you have been charged a careless penalty. In that case they can suspend it if there are SMART conditions put in place to prevent the error happening again.

Has the enquiry been closed? If so, request a review with the view to suspending the penalty. Google SMART conditions + HMRC and come up with 2-3 conditions to suggest. If the enquiry is still open, contact the caseworker directly. They will also be able to explain where the errors were and how they reached their figures.

If the figures are wrong you only have 30 days from the closing of the enquiry to challenge the finding so investigate asap.

Also request a Time To Pay arrangement which is what they call paying in instalments.

Something to consider moving forward is to engage an accountant to submit your DH's self assessment going forward especially if income comes from varied sources.

You could get an accountant (personal tax) to review it for you but you’ll obviously have to pay. It may be worthwhile ringing around some local accountantancy practices and make appointments with their Personal Tax Manager. You should get initial appointments fairly quickly.