Tax Forum :: Free Tax Advice

Hi
I have just put my 2017 to 2018 self employed return in to be told I owe £2200 from an estimated return from 2001 to 2002 and 2002 to 2003 , I have never been contacted from hmrc about this and have been doing self employed returns from 2012 , to top this off they have charged me with £1500 in intrest to a total of £3720 .
The hmrc owed me £4220 from tax over payments but are only willing to return £550 , I was not even working in the years 2001 to 2003 due to illness .
It has taken me 7 weeks to be told by hmrc that it my responsibility to prove that I don't owe this money but how am I meant to do this ?
This has really left me in a right mess as a construction worker who is out of work and not getting any benefits and my savings are nearly gone .
Any ideas ??

If you genuinely did not receive notices to file Returns for 2001/02 and 2002/03, and you genuinely did not receive any notices of determinations from HMRC (and this would be better if you can demonstrate that you did not receive them, though proving a negative is rarely easy), then you can ask for a late appeal to be accepted on the ground that you were unaware of the determinations in the first place.

If you were sick for the entirety of those tax years, and so had no income which would give rise to a tax liability, then you can ask HMRC to withdraw the notices to file the Returns under TMA 1970 S8B. However, giving the elapsed time, HMRC may be reluctant, and you may have no choice but to go to tribunal.

You could test out
(A) the statute of limitations and HMRCs seeming negligence in not pursuing what they allege was an established debt
(B) if you genuinely did not trade in the year then their assessment (if any would be invalid) as there’s was no evidence that the source existed for the years. Backed up my medical evidence of your incapacity you could also claim equitable liability to reduce the tax liability to nil on the basis that your claim is still in time given that they have only now notified you of the debt

You might even have to make a Data Protection Act request for all information that is held by HMRC to see what evidence they have of the alleged filing position and alleged determination position.

If they are saying what the alleged previous years position is then they would have to have information to evidence that. If they haven’t then it could severely weaken their case. It might also show that any alleged notices etc were not correctly issued.