Help! I’ve got a letter from HMRC! (take 2)

accawebmaster —  19 January 2011 — Leave a comment

By Chas Roy-Chowdhury, head of tax, ACCA

Another year… but not another new HMRC problem; it's actually last year's underpayment and overpayment problem continuing into this year. So, new letters will be going out to UK taxpayers, some containing good news (for the taxpayer that is) and some containing bad news; rebates will be promised and unexpected outstanding payments demanded.

If you're one of those that have received an HMRC letter saying that you've underpaid then there's a couple of things you can do to help manage the situation. Be calm, and don't put off the inevitable either: HMRC's demands will have to be taken seriously and dealt with quickly.

If you feel that the payment demand you've received is incorrect, then gather all of the necessary paperwork to help prove your case when you speak with HMRC (this would be forms such as P60s, P45s, P11Ds, or if you have trading income, items such as invoices and income information from bank statements or accounting records).

If you speak with someone at HMRC make sure you get the name of who it is that you've spoken to. Make sure you take note of the time and date of the conversation too.

It's best though to keep as much in writing as possible so that there is no confusion and less scope for ambiguity. Keep copies of all correspondence that you have with HMRC.

Lastly, make sure you pay up on time if you've been asked to pay. Be aware though that HMRC might allow you an extended period to pay your tax; they are open to negotiation, but you will need to give a good reason why you cannot pay the full sum demanded.

Still, it's important to deal with the issue as soon as possible; this goes for all dealings with HMRC, who won't shy away from chasing down unpaid tax.

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