Got home tonight to an un-expected letter from the tax man telling me he owes me money from back in 2007! Very nice, completely out of the blue and the money will come in handy. (Either that or I'll waste it!) Upon closer inspection though I've noticed a couple of details that have me stumped. The first being they are going to tax me on my tax rebate? I'm a little puzzled by this as surely this money has already been taxed when they took it off me in the 1st place? Secondly, back in 2007, correct me if I'm wrong, the tax rate was 17.5%? So how come the rebate I'm about to get taxed on is being taxed at 20%?! Am I missing a trick here or is this like them saying, "We've robbed you once so we'll do it again"?!
This is random, i also received one of these bad boys today, well, i got a phone call from my Dad telling me i had. Happy days though, it's money for nowt far as i'm concerned! Bet365 will see most of mine...
Well, for my saturday job, I'm being taked at 20%, so I need to claim about 200 quid back off the States of Jersey!
I deal with the HMRC on a regular basis and am therefore used to their ways but this has me stumped. You simply cannot be taxed on a tax refund. I would query this if I were you. I cannot remember when the basic rate dropped from 21% to 20% but it was one of the two in 2007. In any case, you are taxed on the rate operable when a payment is made, not on when it was originally due.
Tax demands are often wrong, so take a good look before you pay up. If you're terrified by the tax demand that lands on your doorstep, you are not alone. Millions of us are waking up to a brown letter from the taxman, who is dealing with a vast backlog of cases. What's more, it is getting ever more difficult to get hold of someone at Revenue & Customs (HMRC) who can sort out any mistakes. HMRC announced this week that its helpline would be shut on Sundays from November 29, and will open only until 4pm, instead of 8pm, on Saturdays. Even though you may end up hanging on the telephone, the taxman has made systemic errors in so many cases that you really need to check whether their calculations are right before you pay up. We asked accountants for tips to help taxpayers cope with tax letters. Don't be afraid to demand Check all the items and amounts carefully in any letter you receive, and do not be scared to challenge HMRC. For example, do you agree that you had a company car of a specific value and with the carbon dioxide emissions as stated? Did you have private medical insurance? Act promptly and keep records If you get a tax statement – formally called HMRC form P800 – which you believe is incorrect, bring the discrepancies to the attention of the tax office immediately. Don't wait until the tax is being demanded. If you disagree with the authorities, make your point in writing and be able to provide proof, ideally copies of the supporting paperwork. Be sure to keep a copy of all correspondence. Be prepared to come up with the evidence to back your claim You may need to produce pay slips, evidence of pension contributions and other documents from as long ago as 2004. HMRC has only checked for the tax years 2008/09 and 2009/10 but if you've overpaid tax you can claim back at least as far as 2006/07 and may be able to claim back as far as 2004/05 in certain circumstances. Four years is now the normal time limit for reclaiming overpaid tax but people who were not sent tax returns for 2004/05 or 2005/06 may claim back tax overpaid in those years as well. Don't panic! Anyone receiving a P800 from HMRC needs to bear in mind the Dad's Army maxim. You can get free information from the Low Income Tax Reform Group at www.litrg.org.uk/News/2010/paye-round-two or, if a pensioner, call 0845 601 3321. Be aware that some groups are more at risk of tax bungles If you have retired in the past few years, changed jobs, receive benefits–in-kind or have more than one job, you are more likely to be at risk from overpaying or underpaying tax. You are also at risk if you have made additional voluntary contributions (AVCs) to your pension or donated to charity via the Gift Aid system. Another category at risk includes those typically with relatively small investment income, perhaps from dividends or property rental, but which varies year-on-year. You might not need to pay long overdue tax HMRC will only write off tax if it had information relevant to your tax liability and failed to make proper use of that information within 12 months after the end of the tax year in which the information was received. That is likely to mean that most people whose tax 'arrears' only relate to 2009-10 will have to pay the tax unless HMRC agrees to write off the debt on hardship grounds. If the error was made in 2008/09, the one-year condition may be satisfied and, if tax was also unpaid in 2009/10 due to the same error, that year's tax should be written off too. Small errors should also be exempt The authorities have confirmed that where the tax underpayment for a tax year is less than £300, HMRC will write off the amount rather than collect it. Apply the 'common sense' test People who are getting what seems to be a tax demand may take comfort from the fact that this isn't a formal demand – but it is an indication of what HMRC thinks you owe it. There are some simple steps you should take, such as check the basic data; does it make sense? Has HMRC included a company car you gave up years ago, for example? Do the figures look right? Pensioners, for example, often find HMRC has used the wrong amount for the basic state pension. It's the squeaky wheel that gets oiled People expecting a refund not to just sit back and hope. If you have overpaid tax and want it back now, you need to claim it. Beware of fraudsters "HMRC will send tax demands only in writing. If you get an email or phone call saying that you owe additional tax, but get nothing in writing from HMRC, then don't pay it."
****ing hell Phil - that's a bit heavy for a Tuesday isn't it!! I have an accountant who seems to have me up to speed (for my self employed work) and have been employed continuously, full time, for over 10 years so am expecting nothing back from the tax man - he might ask me for more from my self employed but we'll see - I have enough to one side for such an event!!
Firstly, you're getting VAT confused with Income tax. Income tax for most people in the UK is taxed at circa 20%. VAT has fluctuated from 15% to 20% over the past few years and will probably go up to 22-25% depending how the Germans get on with the Greeks. Secondly, you can and will be taxed on tax rebates because they are essentially telling you they took too much tax from you back in 2007 and that should have been income that was only applicable to the tax rate on which your salary is earned. You will receive 4 out of every 5 pounds on that rebate. As you said, it's a nice surprise anyway so I wouldn't waste time complaining.
This is (sadly) right up my street! I work in the tax department of one of the largest accountancy firms in Norfolk. First thing is, regarding the tax rate, your confusing Income Tax and VAT. The income tax rate is 20%. However, it was 22% up until 2007/08 (i.e. the year ended 5 April 2008), so it sounds like they may have gotten this wrong. I wouldn't bother mentioning it though, as it works out in your favour. You should not be taxed on your tax refund though, ever. Are you sure you have read the statement correctly? I have never ever heard of HMRC taxing a tax refund. If they have, it's a mistake. It is not taxable income, it's a refund of tax incorrectly deducted.
My last tax rebate was for 47p and they then took 18p off it for some reason, probably cost them more to post and admin it than it actually was. No wonder the country is going down the plughole kin beaurocrat twats.
Hi mate. The breakdown of the payment owed to me has a total figure repayable to me 2,136. Then it goes onto say Tax is chargeable on this amount @ basic rate of 20.00% on 2,136 = 427.20 Then it gives the revised figure which I will receive payment for after the 427.20 has been deducted. Does this sound correct to you?
For the 2007/08 tax the first £2230 of your income will be taxed at 10% & from £2231 to £34600 you are due to pay tax at 22%. You definitely won't have been taxed on your refund. What will happen is the taxman will work out how much tax was due for that year, after deducting your personal tax allowance(tax free income), & charging the remainder at the rates of 10% & 20%. He will then see if what tax is due & compare that with what you've paid. If you've paid more then the difference will be repaid toy you.
