Charity issues guide to help taxpayers pay the right amount

From this week, HM Revenue & Customs (HMRC) are starting to issue tax reconciliations to millions of employed taxpayers and pensioners for 2013/14.

Many of these will show that there is tax outstanding and HMRC will want that tax paid. The Low Incomes Tax Reform Group (LITRG) has issued a guide to help taxpayers understand their actual tax liability.
 
A guide issued today by the Low Incomes Tax Reform Group leads you through the steps to check these forms P800 that are issued to people who are paid through PAYE (Pay as You Earn), but are not within self-assessment – and points out ways you may be able to reduce your tax bill or have it set aside altogether in some cases. What is crucial is that you do check it – sometimes there are mistakes and sometimes there are extra reliefs that you can claim. But you need to take action. Where there is extra tax to pay, HMRC will try to collect it from you via your earnings next year or, failing that,  will ask you to pay it in a lump sum.
 
Anthony Thomas, chairman of the Low Incomes Tax Reform Group, commented: “Millions of these reconciliations are issued each year and while most of them are correct, many have discrepancies that can be due to mistakes made by the employer or pension provider, or HMRC. Sometimes when that happens the taxpayer will be able to have the tax due written off or reduced, but this can take considerable time to sort out. If you think that it was an error by HMRC or your employer or pension provider that caused the tax underpayment, we suggest you make no payment of tax until the issue is fully resolved.
 
“We urge you to contact HMRC and query the figures as a matter of urgency if you are not sure they are correct. Make sure you understand how any tax underpayment has arisen – and, if necessary, ask HMRC to take action to ensure the problem does not repeat itself.
 
“Where paying the tax will cause you hardship, we also recommend you contact HMRC as soon as possible so that you can negotiate a payment plan.
 
“Always remember to take a note of the date and time of any call made to HMRC so that your call may be traced, if necessary.”