Under taxed now Inland Revenue demanding outstanding money

[tgm1974]

My Dad has been working for 25 years for the same company then decided to take voluntary redundancy when the company stop trading. Due to his age he was also able to take up an early pension.

As my Dad is "Mr Active" he ended up getting himself a part time job with Marks & Spencers. He provided his P46 (or whatever you hand in) to M&S and his job has been with them now for 6 yrs. Recently he has been talking to one of his close colleagues about tax. He is being taxed from his M&S salary alongside his pension yet it has come to light that he has not been paying enough tax .... according to the Inland Revenue he owes them over £6000.00 to which they are demanding this is paid before the end of September 2009.

Can they do this - he has wrote a letter to them arguing that he did all he was requested when he changed his job and he is now waiting their reply.

Any advice?

[ummmm]

I think the demands are computer generated from HMRC. He should ask why he's been on the wrong tax code and try and get an explanation from them. I know that they change people tax codes to recover unpaid tax. He should probably suggest this.

[factor-fiction]

HMRC are entitled to the money I'm afraid, but as ummmm suggests you should ask them to recover the money over a period. This assumes you agree that tax has been underpaid- if you have any doubts ask for a full explanation. Has tax been deducted from his pension and his salary? I suspect his salary either took him above the tax free allowance , or maybe the combined income took him into the higher rate tax band. Things are more complicated when you have a job and a pension as there will be P45/P60s for both.

[Chickadee]

My hubby was getting a private pension when he got a part time job at B & Q.

B & Q taxed him on his pay but I suggested he check with the tax office because of the pension. Good job we did because his tax code was all wrong. He was only being taxed on his pay. If we hadn't checked he would have owed loads.

I think this may be what has happened here. M & S will only tax him on his pay. The people paying the private pension would tax him on that. He probably should have contacted the tax office at the time.

[Nannyjill]

I think Chickadee has hit the nail on the head with regard the short payment of tax. I'm not sure what "he did all they requested when he changed his job"means.

I would still ask for a detailed explanation, in writing, as last year I sorted out 3 tax demands that were incorrect, 1 along similar lines to this and although she had to be some additional money it was nothing like the amount originally asked for.

[hev]

Discrepancies in tax can arise when there are multiple incomes, employee benefits moving jobs frequently etc. It is up to you as an individual to make sure that your tax coding is correct and that you are paying the correct amount of tax. The tax office can only base the tax codes issued on information already held which is usually for previous years earnings as they only get details of money earnt at the end of the tax year ie P60's and have no way of knowing that beforehand. You can ask for a breakdown of the outstanding amount and request a time to pay ie through your coding. If the calculation is correct you will have to pay it