Assessments showing calculations of tax that taxpayers have either overpaid or underpaid in respect of the tax years ended 5 April 2008 and 5 April 2009 are already beginning to be received. This is likely to go on for months.
Typically, those affected are employees who pay tax through PAYE, have not been required to complete self-assessment tax returns and are, therefore, unlikely to have tax advisors to deal with the calculations on their behalf. If you fall into this category, read on…
WKH tax manager, Graham Boar has some pointers for you to bear in mind.
Firstly, don’t panic! You have 30 days from the date of issue to check the assessment and contact HMRC if you don’t agree with the calculation.
How do I check the assessment?
Compare the figures on the assessment to any evidence of income and tax paid that you have (e.g. P60, Bank Interest Certificates). Also, check the allowances that are due to you. HMRC has produced a basic guide to checking your calculation which is available from their website. www.hmrc.gov.uk/helpsheets/P800-notes.pdf If this is not accessible to you, copies of the helpsheet are available at WKH’s offices.
What if the assessment looks to be correct?
If you agree with HMRC’s assessment, you need do nothing more.
If you have underpaid tax and the sum due is less than £2,000, the underpaid tax will be collected from your pay via your tax code over 12 months starting April 2011.
If you have underpaid tax and the amount exceeds £2,000 or you have insufficient income to allow the tax to be collected from your earnings, HMRC will be contacting you separately about payment.
If you have overpaid tax, a repayment should be sent to you soon after the calculation has been received.
What if the assessment looks to be wrong?
If you disagree with HMRC’s calculations, contact HMRC at the telephone number or address shown on the calculation. You may be asked to provide any documentary evidence to HMRC - keep a copy of the documents and the covering letter.
As well as straightforward mistakes, there may be grounds for disputing the calculations, even if the figures used are apparently correct. It may be that you will be able to show that your employer has, for instance, used the wrong tax code. To prove this you would need to compare coding notices that you have received with the tax codes that have been used on your payslips. In such cases it may be appropriate to approach your employer for any tax underpaid.
Alternatively, you may believe that HMRC has not used information provided to it in a timely fashion. Where that is the case it may be possible that any tax being demanded could be forgiven. This is covered by Extra-statutory Concession A19, which is available from the HMRC website. Again, if you do not have access to the HMRC website, copies of ESC A19 are available from WKH’s offices.
A final and really important point - do not respond to any e-mails appearing to be from HMRC. HMRC do not contact taxpayers via e-mail.
Further information can be obtained from HMRC’s website, your local Citizens’ Advice Bureau or from Graham Boar at WKH on 01462 687333.
WKH Chartered Accountants and Business Advisors has offices in Letchworth, Royston and Cambridge. www.wkhca.co.uk