Last week, the Inland Revenue announced that up to 5.7million taxpayers will receive a P800 assessments statement stating that they have underpaid income or capital gains tax for 2008/09 and/or 2009/10.
So if you are one of the unlucky ones receiving this assessment in the next few days, what should you do?
The obvious thing I would say is not to make payment immediately because they are a number of ways that the taxpayer can have the amount to be collected cancelled or reduced.
STEP ONE
If you receive a statement stating that you have underpaid income and/or capital gains tax for the year ended 5th April 2009 and all the information that the Inland Revenue require to correctly calculate your tax has been supplied to them then I would write to the Inland Revenue and ask them to cancel the amount now collectible under the terms of Extra-Statutory Concession A19.
STEP TWO
If you receive a P800 assessment for both years and it was the fault of your employer and/or pension provider because they failed to apply the correct PAYE Tax Code to your income, then the Inland Revenue should make the first call on payment to your employer and/or pension provider NOT you.
If the Inland Revenue try to collect from you and you believe that your employer and/or pension provider was at fault then please challenge the Inland Revenue.
STEP THREE
Please review the P800 assessment very carefully. It may not reflect the taxpayers affairs and may omit tax reliefs, such as pension contributions or personal allowances, or include income which does not relate to the taxpayer.
If, after going through the above steps, you still disagree with the Inland Revenue's assessment then the taxpayer can refer the matter to the independent Adjudicator, although you cannot appeal.
I would advise that you consult an accountant if you receive a P800 assessment. If you would like further advice then please contact Mark Hewitt http://www.truemanbrown.co.uk/
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