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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Looking for assistance with an estimate for 2008 tax year.

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Looking for assistance with an estimate for 2008 tax year. Revenue have estimated £40,000. This is now £52,000 with interest and penalties. Yet between the years 2001-2013 my total tax payable has now been calculated at £274. I was suffering extensive
issues following the collapse of a previous business followed by two major thefts by business partners, leaving me virtually homeless and unable to keep my filings up to date despite my best intentions. Revenue are refusing to budge now that I am finally earning
enough to pay an accountant and get everything up to date, saying I have run out of time to appeal for 2008. They are now taking me to court.

I assume we are talking about your personal tax situation. Did you submit tax returns for the tax year concerned, 2007/08 or 2008/09 or, in the absence of those, have HMRC issued determinations for the tax year concerned, 2007/08 or 2008/09?
Customer: replied 3 years ago.

Yes, personal tax. I did not submit returns between the years of 2007 and 2013 until a few months ago. We have now submitted returns for 2007/08 and 2008/09, yes. Tax in both cases is NIL. They have no issue with this, they do not dispute it. Yet they say that because they made an estimate and I did not argue it within the time limits, I have to pay the estimated amount.

Their estimate is for tax year ending April 2008, with estimated tax of £40,000. £4,000 surcharges. £7,293.25 interest. £200 penalties.


Leave this with while I draft my answer.
Hi again.

You clearly submitted the returns late and beyond the date that HMRC are obliged to accept them, though if those tax returns showed tax due they would want it paid.

I think if you went to court, the court might throw the HMRC case out but that's not really a risk you want to take even if they have no evidence to prove that you owed the tax they want paid. Instead, you hit them with a smart bomb called Overpayment Relief Special Relief which you can read about here. Read all the notes. Read the notes here too. It's fairly easy to follow. Such a claim can only be used where one or more determinations have been used by HMRC to assess your tax liability. I cannot see how they can have done it any other way.

Have your accountant write a letter to claim the relief and make sure you are completely up to date with your taxes apart from the tax year or years in dispute. I've used this relief in the past and it annoys me that HMRC don't refer taxpayers to it, though in some cases, the tax official clearly didn't know it existed. HMRC won't want to go to court and have to tell the court that a claim for overpayment relief special relief has been made and that they have no evidence to prove that you owe what they say you owe.

I hope this helps but let me know if you have any further questions.
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