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Where Taxpayers and Advisers Meet
Charity issues guide to help taxpayers pay the right amount of tax
23/05/2014, by Low Incomes Tax Reform Group, Tax Articles - General
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HM Revenue & Customs (HMRC) are issuing 2013/14 tax reconciliations to millions of employed taxpayers and pensioners. LITRG has issued a guide to help taxpayers understand their actual tax liability. 

Introduction

A guide issued by the Low Incomes Tax Reform Group (LITRG) leads you through the steps to check the forms P800 that are issued to people who are paid through PAYE (Pay as You Earn), but are not within self-assessment, and points out ways you may be able to reduce your tax bill or have it set aside altogether in some cases. What is crucial is that you do check it – sometimes there are mistakes and sometimes there are extra reliefs that you can claim. What you need to do is take action. Where there is extra tax to pay, HMRC will try to collect it from you via your earnings next year or, failing that, will ask you to pay it in a lump sum.
 

Tax reconciliations

Millions of these reconciliations are issued each year and while most of them are correct, many have discrepancies that can be due to mistakes made by the employer or pension provider, or by HMRC. Sometimes when that happens the taxpayer will be able to have the tax due written off or reduced, but this can take considerable time to sort out. 
 

LITRG guidance

  • If you think that it was an error by HMRC or your employer or pension provider that caused the tax underpayment, make no payment of tax until the issue is fully resolved.
  • Contact HMRC and query the figures as a matter of urgency if you are not sure they are correct. Make sure you understand how any tax underpayment has arisen – and, if necessary, ask HMRC to take action to ensure the problem does not repeat itself.
  • Where paying the tax will cause you hardship, contact HMRC as soon as possible so that you can negotiate a payment plan.
  • Always remember to take a note of the date and time of any call made to HMRC so that your call may be traced, if necessary.
 

Useful link

About The Author

The Low Incomes Tax Reform Group (LITRG) is an initiative of the Chartered Institute of Taxation to give a voice to those who cannot afford to pay for tax advice. LITRG comprises tax specialists from professional practice and the voluntary sector, from publishing and from HM Revenue & Customs, together with people from a welfare benefits and social policy background. Visit www.litrg.org.uk for further information.
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