www.iva.co.uk

Hi all,

I've received a letter from Inland Revenue this morning advising that I underpaid tax by £700 for tax year 2009-2010.

Do they not go by the information supplied by my employer?

How was I to know/check that this information was correct or incorrect?

Does anyone have any ideas of what I should do?

I am obviously going to speak to my employer and the Tax people.

I am really worried now because the extra to be deducted every month to cover this is going to have to come out of my IVA allowances for essentials like food, clothes etc.

Is this income tax, or did you get tax credits?

This is income tax, I don't get tax credits.

I am a single person, living on her own.

I was so glad to see the back of 2010, but it looks as if 2011 is showing signs of being just as bad.

That's not good and unless your tax code has changed then I don't see how you could have underpaid as it is obviously deducted at source. I presume you are the same as me and don't fill a tax form in?

Is the IR helpline open today? Might be as well to give them a ring now and query it with them if they are.

Since I don't fill in a tax form I am inclined to think my employer is at fault here.

It just seems so unjust that I am left with a huge tax bill through no fault of my own.

We also had a similar issue with the IR after our IVA started, If it is correct that you owe £700 it could probably be added to your IVA. Your countdown shows you have only been in the IVA for 1 month and the underpayment (debt) would have been before this i.e. tax year end April 2010. If, after querying with the IR, you have underpaid I would speak with your IP straight away.

Good point - certainly have a chat with your IP about it.

Was there not a statement last year from the IR that lots of people were going to get letters like this, something to do with there computer system. I dont think it is your employer but the IR itself

Pandy wrote:

Was there not a statement last year from the IR that lots of people were going to get letters like this, something to do with there computer system. I dont think it is your employer but the IR itself

oh yeah, I seem to remember hearing something but didn't take much notice since it was a 'won't happen to me syndrome'.

The next 12 months will be more of a financial struggle, than I first thought, oh well I could do with losing weight !!

Hopefully you can get it sorted without resorting to starvation!!!!!!!!!!!

Hi LHA
If this is correct and your IP cannot include in your IVA, you can ask HMRC to collect over 2 years and not just one. Do you just have one job, or did you change jobs during that tax year and what tax code were they using?

Thanks neopensioner didn't know about the 2 year thing, that would relieve a bit of pressure. I have one job and been in my current employment for 10 years. I wonder why all of a sudden my tax allowance was quite obviously incorrect.

If this cannot be added to my IVA is this not deemed as giving one creditor preference?

I hope that you will find that it has been a mistake, especially as your tax code should be the same as it has always been.

Check your payslips - is the tax code the same as it has always been?

If you only had the one job that year your starting tax free allowance was £6475 giving you a code of 647L however if you have benefits in kind like private health care or company vehicle your tax free allowance would have been reduced to allow for the tax on these things. Maybe you had benefits in kind that were not included?? If you need to repay over 2 years just phone HMRC tax office and tell them. Hope this helps

If this debt pre-dates the IVA then it is a creditor - and HMRC cannot prefer themselves by amending your tax code and collecting the money that way.