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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4087
Experience:  FCCA FCMA CGMA ACIS
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I have received a letter from HM revenue and customs stating

Customer Question

i have received a letter from HM revenue and customs stating i owe over £900 in underpaid tax i am a pesioner and retired
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
My first advice is never, ever, under any circumstances whatsoever deal with HMRC on the telephone. There is far to much chance of the official there getting hold of the wrong end of the stick if they can even find the stick at all. Always use a letter then you have a written record of what has been disclosed. Have HMRC advised as to why there is an underpayment of tax and for what tax year? If this data is not available you should immediately challenge the Department in writing and demand an explanation. Remember HMRC are very keen on making assumptions, invariably incorrect and always in the Revenue's favour.
Now my immediate reaction is that, as a result of incorrect tax code numbers being issued, the wrong amount of tax has been deducted from your occupational pension if you have one. Your State pension, as you probably know, is taxable, but paid gross. The tax due is then recovered by reducing your tax code on your occupational pension. If the wrong amount is included in the code's computation then the incorrect tax may be deducted. If this is the case then regrettably you do owe HMRC money and will have to cough up. If you cannot afford the 900 quid in one whack then approach the office concerned to arrange a mutually acceptable repayment schedule.
This brings me to my next point. Always check code numbers on each and every time a new one is issued and if it is incorrect then write to the issuing office request a correction. HMRC on their own admission send out literally thousands of incorrect codes every year. For 20 years now my initial coding was wrong and you could have knocked me down with a feather when they got it right this year, well nearly!
I do hope I have shown you a way forward with your little problem.