On the 21st December (my 35th birthday for those of you who’d like to send me a card in future!) those lovely people at HM Revenue & Customs sent me a bill for just over £750 for underpayment of tax in the year 2000/01 which I was to pay by tomorrow. In other words 6 business days notice.

There was no explanation as to why nearly 7 years on I was suddenly liable for this amount of money. Much as I’d like it to be otherwise, I just don’t have that sort of money to hand to pay for bills with this little notice. I immediately phoned up the helpline to discuss what the bill was for, why I was suddenly expected to pay it with next to no notice and how I could extend the deadline slightly to give me a chance to come up with the money.

I pointed out that any other business would surely give more than 6 business days notice and if it didn’t (after such a long period of time had elapsed) the Government would come down on them like a tonne of bricks. This is especially bearing in mind that the letter was overtly threatening (non-payment by 3rd Jan would result in a fine and interest would begin to be accrued immediately), had no justification for the request whatsoever and was the first I’d heard. I asked the lady on the other end of the phone, that if I sent her a bill for £750, to be paid within a few days, would she send me the money immediately?

Apparently I was being ridiculous… what would the bill be for she asked? I asked her the same of my tax bill – what’s it for? I worked in that tax year and was part of a PAYE (pay as you earn) scheme – what’s suddenly changed? I was told she couldn’t tell me what it was for, but if I wrote in and allowed one calendar month for it to be processed, they would send me further information. However, I should be aware that fines and interest would begin to accrue immediately 3rd Jan had passed.

All over christmas, this has been at the front of my mind and worrying me desperately. So much so, that my lovely sister-in-law even offered to help out and loan me the money to avoid fines. I didn’t take her up on this kind offer though, as I couldn’t believe I could possibly owe them the money.

Anyway, I got in touch with my old company and asked for them to email me a copy of my P60 for that year which they did.

Armed with this information, this morning I went down to my local tax office (thankfully it’s in Maidstone). It turns out, I’d incorrectly added statutory maternity pay (which should not be taxed) to my income and all of a sudden they’d decided I should be charged additional tax. In addition, this was the year that I was made redundant. I’d filled in the amount of my redundancy in the appropriate box on the form (self-assesment). Any amount under £30,000 is tax free – mine was substantially under this amount, but a clerical error had meant that they now deemed this to be a taxable amount hence the sudden bill.

To cut a very long story short, it turns out that HMRC owe me money (to the tune of at least £500). All I had to do was put my request in writing – they told me exactly what to write – and post to my local tax office. At the time of this, I was on the phone to a national call centre whilst sitting in my local office. I got a piece of paper off a clerk in the office, wrote the letter and handed it in.

How long would it take to process I asked? This is bearing in mind that;

1. I had handed in the letter to my local office (so there won’t be any postal delays); and
2. They’d expected me to deal with this whole issue (and pay) within 6 business days.

The answer?
I need to allow one month for all post.

But it’s not really post I said – just hand it in to the person in the office next door (away from us pesky tax payers) and they can make the two amendments and process the claim immediately.

Oh no, I was told, all letters have to go via our postal system and you need to allow one month.

No doubt my letter is now sitting in someones filing cabinet for an alloted period of time, before being sent to the office next door, via Australia, for someone to file for another pre-determined period before anything’s actually done.

If I have to wait for a month will I still be fined and interest added to this non-existant bill? was my next question.

Yes. I will be fined for non-payment and interest will begin accruing on Friday morning. However, should it be that I do not actually owe any money, they will drop the fines and interest – how very kind!

Final question – Can I fine you for not paying quickly and how do I go about charging you interest?

Apparently, HMRC do not have to pay fines for being slow or making mistakes (surprise surprise) however, interest will automatically be added to my claim, backdated to 2001.

So, although the tax office managed to ruin my birthday, christmas and new year, at least I don’t owe them any money, and even better I’m going to get a lot back!

A happy ending for me, but what about the poor people that just bury their heads in the sand, knowing they can’t possibly afford bills like this and not realising that it may well be just a mistake by the tax office?

I’ve filed this post under ‘crime’ as I think it is one!

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