SELF ASSESSMENT 2006-2007 help

[hariboh]

Need some advise please......

My husband is a self-employed sub contractor, he gets his tax taken off at source, tax year 2006-2007 he stupidly never done his tax return on time.

He has since done his self assessment at our local tax office about 4 weeks ago approx

His profits for the year were £26,000 and he paid tax on his vouchers of £6,240

He has just received a letter from inland revenue about late payment/surcharge notice

Section 59c(2) unpaid tax £3450.00 @ 5% surcharge of £172.50
Section 59c(3) unpaid tax £3450.00 @ 5% surcharge of £172.50

total surcharge £345.00

I know it means that he owes them £345.00...... but do we also owe them £3450??

[smithy05]

Hi
The simple answer to this is yes. Your tax liability for the 2006-2007 tax year was due and payable on 31/01/08 together with the first payment on account so you will need to pay the bill plus the surcharges.

[robbob]

Hello Hariboh

Do you know if the inland revenue have actually processed the form submitted?
From the figures you have given(I am presuming your husband has had no other income for this tax year) I calculate your husband will be due a small tax refund for this year.

This means any surcharges calculated will be reduced to Nil once the return is processed.

It sounds like the revenue have made a determination of tax of £3450 which would have been their estimate which stands until correct figures are submitted AND processed.This should not take long to correct itself if the revenue have the completed return.

It is not uncommon for the revenue to take 4-6 weeks to process a return that has been submitted , but it may be sensible to contact them to make sure the return has not been lost and also ask them to withhold any collection action as the revised liability will be Nil.
Also check any calculations they do as there is no certainty they will come up with the right amount due !!!

If there is no liability then there will also be no payments on account for 07/08.

It is possible however that liabilities/surcharges may be due for 2007-08 if this return has not been submitted or tax due has not paid.

[paulywills1]

Hi Robbob

Am I correct in thinking that if there is infact no tax due in that particular year then no penalties or surcharges can be levied on the individual ?

[robbob]

Hello pauly

That is true for 06/07 - therefore providing the tax liability is amended to a refund the surcharges will be reduced to Nil.