Those of you who have been following this blog and the wider media will know that HMRC began sending out notices to 1.4 million people who they believe have underpaid UK PAYE in 2008/09 and 2009/10. Receiving one of these notices is no laughing matter and we understand that some taxpayers simply cannot afford to employ professionals and may not have enough tax knowledge to appreciate either their rights or what to do next.
We therefore want to take this opportunity to draw your attention to the following guidance issued by the Low Income Tax Reform Group (LITRG) (an initiative of the Chartered Institute of Taxation).
It contains clear guidance on:
- what steps to take if you get a notice;
- what information you should review; and,
- a discussion of your options.
It's written in plain English and also includes details of Extra Statutory Concession (ESC) A19, previously an almost unknown ESC, which has the potential to release taxpayers from a tax debt. Of course, whether A19 applies is specific to each taxpayer's circumstances but we strongly recommend everyone considers whether they are within its terms.
Finally, the guidance includes 5 letter templates which will assist taxpayers in responding to HMRC; the letters range from how to claim under ESC A19 to how to make a formal complaint.
In issuing this guidance, here's what LITRG Chairman John Andrews had to say:
“Taxpayers receiving tax calculations from HMRC are in need of help – particularly if these show that they owe money to HMRC and they cannot afford to pay for a tax adviser. We do not feel that HMRC have done all they could to help the vulnerable and the uninitiated – something which we hope will be improved before the large bulk of the six million calculations are sent out.
“So to fill the gap, we are providing extra guidance. The position is complicated, but we have tried to cover most circumstances.
“Whilst it is difficult to generalise as an almost infinite variety of circumstances could apply, our aim is to provide help which people can then fit to their own situation.
“We will be refining our advice as further evidence of the nature of problems occurring becomes apparent. In the meantime, we hope that HMRC can improve their guidance, particularly for people without access to the internet. We also hope that in areas of doubt, of which there are many, they will apply a generous and sympathetic approach.”
As soon as the LITRG publishes further guidance, we will make sure to bring it to you here.