Second letter from Inland Revenue - underpaid again

[jaabaar]

Hi,

I got a few months ago the famous letter stating I had underpaid tax and it would be collected this financial year. I wrote the template letter trying to have it cancelled. Just got a letter back saying it was rejected.

Today I get another letter for the year 09/10 underpayment. Have to pay nearly 1000 pounds this financial year. This means I actually pay money to go to work after paying nursery and travel :(.

The underpayment was for benefits received (private medical insurance and travel card). All this info was given to the Inland revenue. Still they rejected.

Did anyone have luck in having underpayment due to benefits cancelled?

Thanks....

Do you mean you never paid income tax on the money used for medical insurance and the travel card? Because you are supposed to (if the travel card is used primarily for private purposes ie commuting), and if you haven't then it is understandable that they are chasing you for the tax.

Of course I agree that you have to pay tax on it.
I am only disputing why they didnt calculate it correctly in the first place in 2008 as they had all the information??? And now I have to pay in one year all the tax on it from 2008?

It's irrelevant that they miscalculated
And subsequently recalculated. You owe the money.

You could go back to them and explain that it will cause financial hardship to pay it all back this year and could you please spread it over two or three years instead?

I don't get the bit about having to pay money to go to work. Surely that only happens if the costs involved in working exceed the amount earned? You owe this money whether you go to work or not, surely?

On what basis are you/were you hoping to get it cancelled? You say you are disputing the reason the error was made, but does that actually make any difference to anything?

I agree with Katie, try and get a longer payment arrangement.