Not a huge amount, but large enough, it seems I’m due to pay the tax office some money due to a genuine oversight on my part in tax year 2015 and 16.
Waiting for the final bill before I discuss ‘a payment plan’, but was just wondering if anyone had any experience/dealings of such a situation, and if so, how they found it?
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Leicester Bangs says
My precise situation was different to yours, but I found the experience of dealing with what I’d assumed would be a hostile, pitiless entity actually quite positive.
I made sure to keep in touch — that was a good decision, I think: contact them before they have to contact you — got a name and direct line number, and then dealt with that one guy from then on.
No doubt it helped that my contact seemed to want to help me, rather do me over — other civil servants are available — but I’m fairly sure a policy of being co-operative, honest and polite paid dividends. (Sadly, not literally.)
Mike_H says
Several years ago I had an unpaid tax bill for a moderate sum, which they chased quite aggressively.
These days, I’d expect them to be politer than then, but just as firm in their resolve to get the money off you.
Native says
Thanks LB.
I spoke to somebody today and she was helpful enough, but kept doing this annoying thing where she’d state something, and then ask me if I agreed it to be correct. Well, I wasn’t always agreeing it was correct or fully understanding it, but it felt like I had a say something like ‘it may be’ or ‘it is as far as I’m aware’ just to move the conversation on.
I’ve been, probably unreliably, informed that when you agree a payment plan you can sometimes make them an offer. I wouldn’t expect that’s the case? What you owe is what you owe, I assume!
Friar says
Unless you’re Vodafone of course.
fortuneight says
I think I vented on here about this a couple of years back; I can’t find the original post.
I did my return close to the deadline in 2014 and found I owed a sizable wedge of cash. My dad had just died and so cash flow was all over the shop – a funeral to pay for, house to clear and sell etc. So when the bill came it mentioned an option to spread the payments and I thought in the circumstances that made sense. It wasn’t the amount that was an issue – just when they wanted it.
I totally didn’t expect the 3rd degree I got when I called the number to request payment by installment. I suppose we got off to a bad start – the HMRC opening line was “we would expect you to have the funds to pay for this. My response – “as someone giving up half their monthly salary via PAYE I’d expect you to take the right amount”.
It was explained to me that I should use up savings, even consider a credit card advance – which really boiled my piss. I was about to ask if they were on commission from Wonga but it seems I’d already said the magic word just prior when relating my outgoings – which turned out to be “funeral”.
They wanted all the money as quick as possible and seemed not to care how I came by it. The mention of funeral expenses got me dispensation to pay what I owed across 3 installments, provided I paid the first there and then via a debit card. And the joy of knowing that they would add interest to the balance each month. Their script requires you to say how quickly you could pay and what amount – they won’t make any offer on either.
Needless to say once I’d made the 3rd and final payment, they chased me for further payment due to them not correctly recording the first one. No apology, just the usual computer error bull. As a rule I’m rarely rude to people in customer service roles as it’s rarely their fault, but when I got a letter threatening debt collectors after they continued to ignore the first payment, I did respond in some detail when the guy on the phone said “Well, looks like it didn’t get entered on your file properly, so I’ve changed it now. Is that OK?”.
As you can tell, I’m over it now and have moved on.
Bargepole says
They will usually accept an installment plan but bear in mind they will charge interest, so from your point of view the fewer installments the better. As mentioned above, be proactive and contact them rather than waiting for them to chase you.
I think you need to agree a plan by Feb 28th following the end of the tax year, strictly speaking (ie by 28 Feb 17 for a debt from tax year ended 5 April 16), but not sure how rigidly they apply this in practice.
NigelT says
Just to say they won’t always charge interest – see below….
NigelT says
I had the experience recently of retiring and then being slapped with a tax bill of over £3k. It was an underpayment for 2015-16 and I was employed and under PAYE!! Before you ask, I wasn’t earning 6 figures or anything, but I had started claiming some pensions and was getting payments from all over the shop and putting it into my company scheme. Frankly, I should have twigged that I was paying the wrong rate on some of these, but I didn’t. I then got two letters dated a day apart saying that I owed £3,600 or £3,040…which I think was pretty poor. Anyway, I rang them and they were pretty reasonable – I laid it on a bit thick about being a pensioner and being really worried, but the big lesson is that it is apparently MY responsibility to make sure I’m paying the right amount of tax, which rather undercut my argument that it was all their fault etc.
So…they said I could take three years to pay, so I agreed to that…I would get a letter confirming in November. BTW – no interest was being charged as I had been proactive. It didn’t come, so I rang in January, and they had no record of that arrangement, only that I’d called. Again, the chap was very pleasant, and we have now set it up, but my main experience is incompetence rather than unpleasantness – the differing letters, not doing as they promised etc.
Lesson – don’t ignore letters, and make sure you get written confirmation of agreements, and a named contact. I spoke to someone in the Hardship Dept., and they seem decent coves.
Twang says
I’ve had more contact with them than anyone would want by preference, but in all honesty given it’s their job I thought they were OK. Maintaining communication, not dishing out the verbal and being straight are the watchwords (much as all are tempting at times….). If they think you are genuinely trying to sort things out they should be OK. Might be worth getting some advice from an accountant of maybe Citizens Advice if the sum is large enough, but I’d just tell them what you can sensibly afford and see what they say. In my experience they tended to send long letters with lots of questions so be prepared.
Dodger Lane says
Not yet been in a situation where I owe them money, have been in a position where they have made mistakes and they have been apologetic and sorted it out quickly. I have friends who have been in a position where they have owed and it might pay to have an accountant (if it’s worth your while) who has experience of dealing with them. My impression is that govt depts are happier dealing with the public but not ‘experts’ who can call them out if they are being unreasonable.
Leedsboy says
I had £7k tax bill when I did my return, as is my style, at the last minute.
I rang them up and they were pretty good. Basically, they let me pay monthly over 4 months. Not brilliant but better than asking for it in one go which is their right.
The right answer is to do you tax return earlier and the give you the rest of the current tax year to pay off the debt. And when it was in my favour, I had the money in days so I thought they were fair.
Uncle Wheaty says
Submit your tax return on line via an accountant who will have told you what you need to pay by 31/01/year. Don’t do this.
Wait for the red letter from the tax office to arrive in mid-February. Pay before the end of Feb. and no charges are incurred but you get 3 weeks extra cashflow.
Native says
Mine is quite an unusual situation, although I doubt I’m alone.
In 2014 it was agreed that Child Benefit shouldn’t be paid to households where somebody earns over £50k a year.
I never knew this to be honest, but I’ve earned over £50k in 2015 and 2016, but still received child benefit – partly for three children, completely for two. Now I’ve had a bill!
BigJimBob says
You and me both. Sorted it out last year going back on PAYE and stopping the CB, which Mrs BJB was collecting. But, since the tax year is one back, I am gonna lose some savings this year.
Native says
Yeah, I’m feeling your pain BJB. Perplexed that they keep paying the CB! The wife and I are separated in all but law, yet she’s spent the CB payments. I’m billed for them! She earns over £50k too – but I get hit as earned more.
BigJimBob says
Ah, she has to ask HMRC to forfeit it. How are relations with her?
Native says
Relations are decent, but from what I understand, because we are not legally separated, I have no grounds. I work overseas or away from home a lot, which has been convenient in the relationship breakdown, but means nothing legally.
Mike_H says
With regards to any State Benefits, it’s up to you to report it if you are no longer eligible or “your circumstances change”.
fentonsteve says
With regards to child benefit, I was half-listening to Moneybox on the radio the other day (I was up a ladder and couldn’t turn over). I’m fairly sure they advised claiming it, then paying it back on your tax return as it gets you your NI stamps. This might apply if (i) you’re a woman (ii) it’s your partner earning above the limit (iii) something else I can’t remember.
Also, it’s on a sliding scale of payback. Above £50,001 you pay back 10%, at £51,101 20%, until at £50,901 you pay back 90%, and above £60k you pay it all back. I know this as the Mrs once went over £50k when she got a bigger-than-expected Xmas bonus.
Native says
Absolutely agree Mike! I honestly wasn’t aware that you didn’t qualify if you earn over £50k.
Leicester Bangs says
Panic in the streets of the Bangs household here. What does one do if one, say, has been receiving child benefit in the circumstances you describe. Cancel it, presumably. Do you then offer to pay it back?
Twang says
Fess and pay up, in that order. Consult an accountant. In my experience they save you more than they cost.
Leicester Bangs says
Great. Thanks. Preliminary enquiries indicate I may be in the clear. Something to do with net and gross.
fentonsteve says
Also, pension contributions come into the equation somewhere. There’s a calculator on a .gov website.
Despite the GLW going back full-time, now the kids are both at secondary school, and the subsequent rise in take-home, she will still qualify to keep some of it.
And she makes me do her Self Assessment return, because I “have the experience” from when I was self-employed. So, win-win for her!
Almost Simon says
Quite glad i came to the afterword to post today, or rather not, seems i have a large CB repayment to sort. Just been calculating and 3 years worth of earning over that amount. FFS. Not happy. Have been searching for for ways to save money this year, now thats totally shafted. My own fault I guess but i didnt know about this rule.
But glad to learn about it sooner rather than even later i guess. What a cheerful end to the week!
Native says
Sorry AS! My fault, you’d have been blissfully unaware for a bit longer, but I’m sure they’d have written to you soon. I feel your pain!
Almost Simon says
Not your fault, in fact i’m thankful. Really. I was quite upset on Friday, (again, not with you.) I’m angry because its not better known, why dont they send a notification to warn parents of the risk if their salary does change. It was a complete shock to me. I now have a payback to negotiate. I’ve experienced a similar process before so that should make it less stressful although the amount is a lot higher this time. Its just frustrating to have this situation for 3 years without knowing. These things are sent to try us!
Ainsley says
I run an accountancy firm for the licenced trade and we come up against this A LOT. Key points are not to ignore it, deal with it quickly and talk to them. We don’t deal with them directly over arrears and arrangements as they prefer to talk to the clients, but in most cases they’ll agree a payment plan and are perfectly reasonable.
There’s always the odd knob, of course, but if you get one of those try to end the conversation without a conclusion and ring back later – you’ll get someone else.
retropath2 says
Curates egg…. A few years back I ran into major cashflow difficulties, scary cashflow difficulties, owing ks to IR. Sure, shouldn’t have but hope had won over expectation around a doomed business venture. Phone calls to IR were terrifyingly bleak and judgemental when contacted, in fear, out of hours. A good accountant helped and, eventually, after warning letters, a man came round. He didn’t take my car, he didn’t price the contents of the house, he listened. He understood. He accepted a plan and I waited and paid. I wasn’t hassled in the interim.
Ride the storm. When their bluster from low level scaremongers fail, the professionals, the realists emerge. You just need a thick skin in the interim. Oh, and a plan.
MC Escher says
If it’s a large sum make sure you follow up any calls in writing, and send it “signed for”.
Almost Simon says
Yep, a few years back, got made redundant and started contracting, working on a daily rate. My own rather scared nature didn’t want to form a limited company stayed on PAYE getting paid weekly through my agency via timesheet. It was pointed out I could claim a certain amount back off my travel as was working at a temporary address (honestly cant remember the exact details now,) but it was a genuine claim. Only problem was when I changed jobs after 18months and went to a similar day rate contract role and continued to claim the same amount. Was only a year or so later I found out the claim applied only to the first role, not the 2nd, so owed a fair chunk of money.
I explained the situation and they were very good. As I was now back in permanent employment they would take the money back via my tax code over the next year. About £100 per month. After a year I was clear of debt. No more self assessment, back as a perm employee for 3 years now. I guess I need to prep myself better next time if the same need arises to return to contracting, next time i’ll go limited company and get myself a good accountant. But in my experience the UK tax office were pretty good, although it was a pain being pushed from department to department, lots of time spent on the phone to them, quite painful but once you got through they were good. Just keep the name of whoever you speak to.