Business News

February 2011

Tax Experts Offer Help on Underpayment Letters

The Low Incomes Tax Reform Group (LITRG) has issued guidance on what action to take if someone receives a tax calculation letter for the 2007-08 tax year from HM Revenue and Customs (HMRC).

The LITRG, an initiative of the Chartered Institute of Taxation, said that while many taxpayers would be due repayments, an estimated 450,000 people would receive letters in February and March telling them they did not pay enough tax via PAYE in 2007-08.

The letters could come on top of notices already received for the 2008/09 and 2009/10 tax years.

LITRG chairman John Andrews said: “It is perverse that HMRC have sent out calculations for 2008/09 and 2009/10 yet are now reviewing the earlier year, adding to the anxiety of those who are unused to dealing with HMRC and may well have thrown away records for 2007/08.

“HMRC chose to delay reconciling taxpayer records for 2007/08, although they had sufficient information in their possession to do so at a much earlier stage.

“We therefore urge P800 recipients showing an underpayment to take action as they should have an even better case for the tax to be written off.”

LITRG’s guidance can be found at http://www.litrg.org.uk/News/2011/2007-08-paye-under.

Stephen Griffiths Manager sgriffiths@milsted-langdon.co.uk