Tax officer at my door

[missetoile]

Hello,
this is really harassment, and I would like advice on how I can fight back. I am self-employed and am/was admittedly two self-assessments behind (2009/10 and the following year). I had submitted one returns in 2008/9 and the tax office simply projected that liability forward - to now over £12,000. That is complete fiction. I tried to submit my 09/10 return myself, but it was sent back as I had used the same form for two different kinds of jobs - one as a service provider and one as sole-trading shop keeper (my mistake for having tried to be honest). That return has just been properly filed by my accountant, and puts the liability down to zero. That sure means that HMRC can now take off the projections and come up with a more accurate figure. Including late fees, that should be around £4,800.
I also currently pay income tax - far higher than I should as the company I freelance for has put me the emergency tax rate of 25% - and I have now paid over £2,000 more than will be justified for this year. Therefore, once the 10/11 return is in, and I didn't have to file one for 11/12 as I was unemployed, I should now be under £3,000.
Yet, for the second time now, an HMRC officer has knocked on my door and posted a letter, saying I owe over £12,000. This is incorrect, and I feel it's bullying.
What can I do? If they wanted to harrass someone, should they not at least go to my accountant for that?
Many thanks for your help. I feel really helpless, but I am willing to fight and complain.
Thank you!

[robbob]

Hello missetoile

That return has just been properly filed by my accountant, and puts the liability down to zero. That sure means that HMRC can now take off the projections and come up with a more accurate figure. Including late fees, that should be around £4,800.

Your accountant should be the one with all the answers - providing they have submitted the required info online i would expect any excess payments on account/determinations to vanish pretty quickly - although hmrc reminder letters always seem to be printed a couple of weeks before they are sent so you may have some out of date reminders being sent if the stuff has only recently been submitted.

this is really harassment

Unfortunately if HMRC do not have up to date required info they simply fill in the blanks as they see fit - until they have up to date info don't expect them to show much understanding as they don't know who does owe money and who doesn't they just chase what the computer tells them. I would say with regard to payments on accounts you can reduce payments on account if you have reasonable expectation that the tax will not be due (with payments being put back in at a later date if you reduce in error).

What can I do? If they wanted to harrass someone, should they not at least go to my accountant for that?

If your accountant has been supplied all the requested information and submitted such to hmrc they should be able to sort this - if its a case that you don't owe the money as you say.

If you accountant is being a bit evasive or woolly with their explanations i would say its time to have a quick chat with another accountant (ideally recommended one) to see if they can shed some light - unfortunately without checking the paperwork in full it sounds like a slightly complicated situation that have any number of answers to your questions.

[pawncob]

I thought you were self employed. If so, why are they deducting tax?

I also currently pay income tax - far higher than I should as the company I freelance for has put me the emergency tax rate of 25% - and I have now paid over £2,000 more than will be justified for this year

[mullet]

That is complete fiction.

Yes, it probably is. But it is backed up by legislation. It is either payments on account from the previous year (you can submit a claim to reduce them if the tax will be lower) or a determination. A determination can only be displaced by the relevant tax return, there is no right of appeal. If you don't file a tax return, what do you expect HMRC to do? Just wait? They have powers, and they use them to encourage you to comply.

I tried to submit my 09/10 return myself

Probably best to use your accountant.

Including late fees, that should be around £4,800.

Are penalties really £4,800? If not, then have you not contradicted yourself by saying that the liability is zero?

and I didn't have to file one for 11/12 as I was unemployed

Not necessarily true. Did HMRC send you a tax return or a "notice to file"? If so then you are required by law to submit a return for 2011-12.

If they wanted to harrass someone, should they not at least go to my accountant for that?

Not if they want money, they will always go to you. Be very careful, the person who called might be a "distraint officer", with the legal power to levy distraint and seize goods to the value of the debt which could then be sold at auction.

I feel really helpless, but I am willing to fight and complain.

If HMRC have lost information or failed to act on it, or if their officer has done something wrong, then fine - complain. But it sounds like you need to look in a mirror to establish who is at fault here. Even if you have an accountant the ultimate responsibility for filing returns and paying on time remains with you.

I know I'm not being very sympathetic, but if HMRC was a person he/she would probably be as frustrated as you are - he/she just wants you to get your returns and payments up to date.

[King_Maker]

As others have said, it's your accountant who should be sorting this out.

Is that not what you are paying him/her for?

Sometimes (often?), the various different sections of HMRC don't always communicate very effectively with each other let alone the agent or the taxpayer.

[Ian McTernan CTA]

I picked up on 'I don't need to file for 11/12 as I was unemployed'. Not correct. If you are in the self assessment system then you need to file if 1. you have something to report or 2. HMRC issued you with a notice to submit a return (which they will have done). You are required to submit returns until they tell you that you don't need to.

You need to get yourself up to date, which your accountant should have done for you by now, including 11/12. The late filing penalty on that one are non-refundable so the sooner you do it the less the total will be.

As to the £12,000, the Revenue are entitled to guess a figure and pursue it up to and including bankruptcy- the only thing that changes the figure is actual figures from a submitted return.