Had a letter from HMRC?

It probably hasn’t escaped your attention that the HMRC have been sending out letters, which for some people represent extremely bad news. You owe the tax man some money.

Lewis Smith & Co. can’t second guess the contents of those letters nor do we no the circumstances of everybody that gets one but we can give at least some reassurance…Just because you have received a letter doesn’t mean that you have to pay immediately!

The key thing to recognise is that the letters are tax calculations and not demands.

First thing to check is what tax year the letter refers to. HMRC have a 12 month window to notify you about tax shortfalls so if the tax year in question is 2008-2009 and you are certain that you provided the tax man with all of the relevant information regard ing your tax affairs then you may be able to use the “Extra Statutory Concession A19 to write the “debt” off. HMRC can respond with a discovery assessment if they believe that you didn’t provide all of the relevant information.

Then check the information provided in the letter for mistakes in job status, benefits (such as company cars) or relevant tax relief. This was a big exercise and mistakes were bound to have been made. Document any mistakes and write to HMRC.

If the calculations show a shortfall of under £2,000 then you should be asked to pay it back through a new tax coding in April 2011. If the shortfall is greater than £2,000 then you may be asked to pay it back directly. In both cases if payment is difficult propose a payment schedule that you can manage.

Of course if you are unsure about anything related to these letters then remember that Lewis Smith & Co. are here to help. We can check the information and work out whether you really owe any tax or not and deal with HMRC on your behalf regarding debt release or payment terms.

Just give us a call on 01384 235549 or email info@lewissmith.com and arrange a free, confidential meeting.

Lewis Smith & Co. – Chartered Certified Accountants in Dudley