Paul Lewis The exercise should end by Christmas. If you get one of these P800s it may say you have paid too much tax and a cheque will follow. Hooray! But if it says you have paid too little the Revenue will want at least £300 and the average is £1400. But you can challenge them.
To get the unpaid tax written off – the Revenue calls it ‘given up’ – you must pass three tests. They work best for tax due in 2008/09 but can be extended to tax due in 2009/10 as well.
1. You have told the Revenue about all your sources of income including any job or pension.
2. The Revenue did not use this information 'in time' to change your tax code or collect the right amount of tax. 'In time' means by the end of the tax year after the tax year you gave the information. So asking you for tax now relating to information you gave in 2008/09 is too late. It is not too late for the tax year 2009/10. But if you are being asked for tax from 2008/09 and the same mistake extends to 2009/10 you can get them linked and get all the tax written off. That is called the 'Exceptional Circumstances' rule and you should quote that phrase.
3. You had a reasonable belief that your tax affairs were in order. In other words you believed that the tax the Revenue told your employer or pension provider to deduct was correct. Believing is not enough; your belief must be ‘reasonable’.
If you pass those three tests then write to the tax office that sent the P800. Set out your argument in those three stages and say you want the tax given up under Extra Statutory Concession A19. Thousands have tried this and about one in three succeeds – those will be the ones who have carefully set out the arguments. So make your case well! Many Saga readers have used this technique to get more than £1000 each of back-tax written off.
If your application fails, write again and ask for it to be re-considered by a more senior tax officer. If that fails consider complaining to the Parliamentary Ombudsman through your MP on grounds of maladministration.
Written by Paul Lewis, this article was first published on December 7, 2010. Paul's opinions are his own and for general information only. Always seek independent, professional, financial advice.
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