underpayment of income tax

by **forevertaxing** on Fri Jun 05, 2009 11:10 am

Along with many others having a rough journey at end of working lifetime- dismissed from employment,at beginning of year, unemployed, have private pension with local council, unable to claim benefit, now on old age pension plus private pension. Usual endowment shortage which should have paid off mortgage at end of working life. Claimed for overpayment of tax due to months of unemployment, surprise surprise, back comes tax letter stating that I have underpayed tax for past 2 years, over £2000 demanded in lump sum stated cannot be taken of paye system of private pension as over £2000. Appears that with overtime income has gone into 40% tax bracket in last 2 years, causing underpayment. I could understand this happening on 1 year then being corrected by tax coding the next year. When asked how this happened when both employer and pension were being taxed paye, told "unknown reason" and "not all cases are checked annually". Have written to tax people to complain that this underpayment is not my fault but not too hopeful! Any suggestions or advise to ease my retirement worries after 50 years of paying income tax without problem ,would be appreciated.

by **Lambs** on Sat Jun 06, 2009 8:08 pm

F,

I don't of course know your precise circumstances, but I strongly recommend that you look at http://www.litrg.org.uk/news/latest.cfm?id=649 on the website of our associates at the Low Incomes Tax Reform Group.

Even if this does not apply to you, there is Extra Statutory Concession A19 where HM Revenue & Customs has been slow to assess tax. This also may or may not be helpful.

This is a situation that we come across time and time again at TW (and LITRG) and I for one strongly suspect that ESC A19 is being 'overlooked' when in fact it should be considered automatically, wihout the taxpayer even having to ask, and is then not applied even when it should be.

Please do update this posting thread and let us know how you get on, even if events take several weeks/months to unfold. The postings are kept in our archives and if you add to an 'old' post it comes back up to the top, so we'll see it again. I can't promise that I can do anything more to help but I'd be grateful for your feedback.

Regards,

Lambs

by **forevertaxing** on Fri Jul 24, 2009 8:56 pm

Update-3 June 09 received a response regarding my official complaint from HM Revenue & Customs, Complaints Section stating that they would carry out a review and get the result to me by 18 June.
On 18 June I received a further letter stating that their systems were undertaking significant maintenance which would take a few weeks during which time they would not be able to access my records or fully answer queries and that they would respond as soon as they could and apologised for the inconvenience. I am still waiting on their response!
I has accessed www.litrg.org.uk and had noted that their press release on Small pensions to be taxed as of 6 April this year but not back taxed the previous 2 years may have been related to my situation but after speaking to one of their advisors, now know that it only applies to privately purchased pensions and does not apply to me.
Thanks for advise and will update when I get response from tax people ( if I'm not banged up for none payment by then!)
Forevertaxing

by **forevertaxing** on Fri Sep 04, 2009 8:26 pm

Lambs
Waited a long time for the response, but worth waiting for! Received letter about 3 weeks ago now stating that this matter should have been picked up by Tax people as all information had been there for them to do so and in view of this and time limit their claim for unpaid tax was now terminated under rule ? and apologised for my worry time. Great weight off my chest. Thank you for your help.

Evertaxing