Man was bankrupted 'over 88p tax bill'TV show claims Inland Revenue blundered

10 March 2008

Matt and Kate Matharu

The Inland Revenue accidentally bankrupted a man who owed it only 88p in taxes, a television programme claims tonight.

ITV1's Tonight programme will air the story of taxi driver Matt Matharu as it examines why more than 1.5 million Britons were given the wrong tax bill last year.

Mr Matharu, from Kent, was made bankrupt after Her Majesty's Revenue and Customs (HMRC) refused to believe he had already paid his taxes.

Tax deducted

After swapping careers from taxi driving to graphic design in 2000, Mr Matharu's tax was deducted automatically from his salary, but although he told the Inland Revenue he was no longer self-employed, they sent him a tax bill for £12,000, believing he was moonlighting as a cab driver.

Last August he was officially made bankrupt in the High Court, only to be told a month later that HMRC had made a mistake and the real sum owed was 88p.

You just keep hoping someone is going to listen

He said: 'You just keep hoping and hoping that someone is going to listen, look at the paperwork you've supplied them, press a button on a computer.'

Bankruptcy overturned

The bankruptcy was overturned last month, but the Inland Revenue is still demanding £45 interest on the 88p, and more than £2,000 in costs, Tonight said.

Matthew Elliot, chief executive of the Taxpayers Alliance, said: 'In a court of law people are seen to be innocent until proven guilty, but with the tax authorities they see people as being guilty until proved innocent.

'You can supply all the evidence you've got, all your salary slips, your chequebooks, literally everything, but the taxman still comes after you.'

Self assessment

The Inland Revenue told Tonight: 'Mr Matharu should have completed a self-assessment return, however we did not explain to him why it was necessary to do this.

'We apologise for this and also not identifying that he had paid tax at source under his PAYE record.'

Two anonymous Inland Revenue whistleblowers also appear in the programme, criticising job losses, closure of offices and shortcuts that they say made it less effective.

The Taxman Cometh: Tonight will be shown on ITV1 at 8pm.

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