Tax appeals, disputes and complaints When you’ve paid too little tax

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You can incur a penalty for HMRC mistakes

You could be underpaying tax because HMRC has failed to take into account information from you, your employer or the Department for Work and Pensions, or it may have repaid you too much tax.

When tax may be written off

In some circumstances, you can ask HMRC not to pursue the tax (Extra Statutory Concession A19 at www.hmrc.gov.uk covers this). However, tax will normally be written off only:

  • Where you were notified of arrears more than a year after the end of the tax year in which HMRC received the relevant information.
  • If you were notified of an overpayment after the end of the tax year following the year in which the repayment was made, and you could have reasonably believed that you had paid the right amount of tax.
  • In exceptional circumstances where HMRC fails more than once to make proper and timely use of information, and arrears build up over two whole tax years – then tax arrears may be given up even if the taxpayer is notified before the end of 12 months following the end of the relevant tax year.

In either case, there is an onus on you to read notices sent to you and check that tax due has been calculated on the basis of correct information.

Your negligence

Under the new penalty regime for incorrect returns, you can incur a penalty for HMRC mistakes that under-assess your tax if you were negligent in not checking what they had done.

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