Income Tax Demand
Discussion
I have worked as a contract management accountant for many years, principally getting employment through agencies. I have usually been paid by the agencies on a PAYE basis, normally earning about £20-25k a year.
In June 2011 I received a self-assessment statement from HMRC with a Determination for 2007/08 for £35,000. I obviously queried this and was told that I had not submitted a Tax Return for 2007/08 or 2008/09 and that I would have to provide income details for this period.
This proved to be difficult as I had had a disk crash on my PC and had lost much of the information for those periods. I continued to receive statements, adding interest and surcharges and finally a letter from the Debt Management dept saying my file had been passed to them. I continued to get letters and even a visit from one of their officials, by now saying I owed over £40,000!
Because of a serious illness, I was unable to spend much time looking into my income for the relevant periods. Finally in June 2012 I sent a Tax Return for 2008/09, which showed I owed less than £200 for that year. On 31 July I sent the 2007/08 Return, showing I owed about £1,700 for that year, making a total debt of about £2,000.
I have now received a letter, this time from PAYE and Self Assessment, thanking me for the 2007-08 Return, but that the time limit for 2007-08 ran out on 5 April 2012. Because of this, the Determination for £35,000 remains in force. They will reduce the penalties for the years to 2010 to the same amount as the tax I owe for the year.
I have no idea where I’m supposed to go from here. Can anybody give me some advice as to my next step please?
In June 2011 I received a self-assessment statement from HMRC with a Determination for 2007/08 for £35,000. I obviously queried this and was told that I had not submitted a Tax Return for 2007/08 or 2008/09 and that I would have to provide income details for this period.
This proved to be difficult as I had had a disk crash on my PC and had lost much of the information for those periods. I continued to receive statements, adding interest and surcharges and finally a letter from the Debt Management dept saying my file had been passed to them. I continued to get letters and even a visit from one of their officials, by now saying I owed over £40,000!
Because of a serious illness, I was unable to spend much time looking into my income for the relevant periods. Finally in June 2012 I sent a Tax Return for 2008/09, which showed I owed less than £200 for that year. On 31 July I sent the 2007/08 Return, showing I owed about £1,700 for that year, making a total debt of about £2,000.
I have now received a letter, this time from PAYE and Self Assessment, thanking me for the 2007-08 Return, but that the time limit for 2007-08 ran out on 5 April 2012. Because of this, the Determination for £35,000 remains in force. They will reduce the penalties for the years to 2010 to the same amount as the tax I owe for the year.
I have no idea where I’m supposed to go from here. Can anybody give me some advice as to my next step please?
Lodge a formal letter of appeal stating that the grounds of the appeal are that you were ill.
Obviously, if that is indeed the truth, you should be able to furnish documentary evidence that you were ill during the period in question.
Why did HMRC issue you with Self Assessment tax return notices for years in which you were
a) a basic rate taxpayer
b) taxed under the PAYE system
Obviously, if that is indeed the truth, you should be able to furnish documentary evidence that you were ill during the period in question.
Why did HMRC issue you with Self Assessment tax return notices for years in which you were
a) a basic rate taxpayer
b) taxed under the PAYE system
Eric
The OP's post says his income was "principally" under PAYEso must assume that the liabilities arise from a secondary self-employment source.
Whilst your recommendation to appeal due to health grounds is recommended, if the OP had filed tax returns previously then the excuse isn't going to hold good as he had been aware of the issue for over 4 years.
I am also surprised and alarmed that he didn't seek advice from an accountant/tax advisor when receiving a determination as this can be enforced as a real debt for a sum that is many times greater than the actual liability!
OP - if you haven't sought professional advice yet, get some TODAY.
David
The OP's post says his income was "principally" under PAYEso must assume that the liabilities arise from a secondary self-employment source.
Whilst your recommendation to appeal due to health grounds is recommended, if the OP had filed tax returns previously then the excuse isn't going to hold good as he had been aware of the issue for over 4 years.
I am also surprised and alarmed that he didn't seek advice from an accountant/tax advisor when receiving a determination as this can be enforced as a real debt for a sum that is many times greater than the actual liability!
OP - if you haven't sought professional advice yet, get some TODAY.
David
s 
Alfamike said:
Because of a serious illness, I was unable to spend much time looking into my income for the relevant periods. Finally in June 2012 I sent a Tax Return for 2008/09, which showed I owed less than £200 for that year. On 31 July I sent the 2007/08 Return, showing I owed about £1,700 for that year, making a total debt of about £2,000.
I have now received a letter, this time from PAYE and Self Assessment, thanking me for the 2007-08 Return, but that the time limit for 2007-08 ran out on 5 April 2012. Because of this, the Determination for £35,000 remains in force.
I wrote a detailed letter explaining my circumstances, but got a further letter restating that as the return was outside the time limit, the determination remains. However, (it stated) people who are out of time to make a self assessment to displace a dtermination... may be able to to claim special relief. I've looked on the HMRC website and it appears I could qualify. There are 3 conditions to be met:I have now received a letter, this time from PAYE and Self Assessment, thanking me for the 2007-08 Return, but that the time limit for 2007-08 ran out on 5 April 2012. Because of this, the Determination for £35,000 remains in force.
A It would be unconscionable for HMRC to seek to recover the determination amount
B The person's tax affairs are otherwise up to date
C The person has not previously claimed special relief.
It says that the Enforcement Insolvency Service (EIS) is reponsible for determining whether a claim fr special relief can be accepted.
Does anybody know what procedure I should adopt? Do I write to EIS or to the tax office to claim special relief? Should I refer this to the Adjudicator before I do this? Basically, what's the best next step to take?
Eric Mc said:
Honestly - get an accountant.
I recently got a client off an £8,000 plus Corporation Tax Determination (and all penalties cancelled too).
HMRC will pay attention to accountants.
Thanks again Eric, but I really can't afford an accountant at the moment. I've been quoted £500 from one to take this on, or £70 an hour with no indication as to how long it may take from another.I recently got a client off an £8,000 plus Corporation Tax Determination (and all penalties cancelled too).
HMRC will pay attention to accountants.
Alfamike said:
Eric Mc said:
Honestly - get an accountant.
I recently got a client off an £8,000 plus Corporation Tax Determination (and all penalties cancelled too).
HMRC will pay attention to accountants.
Thanks again Eric, but I really can't afford an accountant at the moment. I've been quoted £500 from one to take this on, or £70 an hour with no indication as to how long it may take from another.I recently got a client off an £8,000 plus Corporation Tax Determination (and all penalties cancelled too).
HMRC will pay attention to accountants.
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