Underpaid tax on previous years
I doubt I will get much sympathy here but would appreciate some advice.
I am employed. My income in 2017/2018 was £107k. My income in 2018/2019 was £114k. My income in the last tax year was £118k. There is nothing unique about my income - salary, plus commission, less pension contribution. All declared via P60? at the end of each tax year, by my employer.
Until a chance conversation about 6 weeks ago, I simply did not realise that I needed to submit a tax return at the end of each tax year. I knew that personal allowances were cut back once you exceeded this threshold, but I assumed it was done automatically. In fact, I used to be self employed and did so every year, but about 3 years after taking permanent employment, I was sent a letter saying I no longer needed to (granted, this was before I moved onto a commission plan and I earned a lot less).
After that chance conversation, I went online and submitted a tax return for the year just ended. Obviously that is within the deadline, so that's not the issue. I then rang HMRC the next day and explained that I did not know that I had to submit a return. The lady I spoke to was sympathetic, but her system was down, so she said she'd write to me with the tax due. The letter arrived about 3 weeks ago - £3800. In the period between conversation and letter receipt, I paid £750 - to prove my intent to pay.
Yesterday I received a very aggressive call from another lady, who said that since my total debt was so large (£3800 for previous tax years and £3000 for the year just ended) I needed to pay up then and there. She also said I had to make a payment on account for next year - even though my sales are down and my annual commissions cheque, which arrives in March, probably won't arrive at all.
I had actually already made a payment of £750. She is saying that I need to complete an income and expenditure account, but that they need me to pay another £1000 this month and that if I do not do so, penalties will be levied because "you clearly knew you should have submitted returns for the preceding years, because you did one for this year". But this is nonsense - I filled in a tax return for this year, and phoned HMRC the next day. There was no intent to deceive or avoid.
To be clear, this was definitely HMRC and not some scammer, as she had all my details to hand.
Obviously, I owe the tax, but I don't have that kind of money lying around. The frustration for me here is that my employer declared my earnings accurately for each of the preceding two years and HMRC did not act on the information. Does that give me any leverage into forcing through a payment arrangement? I am surprised they are able to chase a debt so aggressively, when they had the information to hand for the prior two years. Any advice?