Although as many as six million people in the UK will get a nice little rebate from the taxman this week, there will be another 1.2 million who receive a bill over the next few weeks for underpaid tax.
The Telegraph reports that HMRC will be repaying the excess Â£2.5 billion in tax it has taken from some since 2001 but will be clawing back Â£720 million from others at the same time.
Those that qualify for a rebate will get a nice fat cheque and those that have underpaid will be given the choice of either settling in full or having their tax code adjusted for the following year so that it can be taken on a monthly basis.
The problems have occurred because of difficulties with the PAYE system resulting in seven million people paying the wrong amount.
For those that have overpaid I hope it helps make the upcoming festive season a little more cheery in these economically bleak times.
For those that have underpaid and receive the dreaded form 800, I would like to bring to you attention the ‘Extra Statutory Concession (ESC A19)’.
This concession applies to income tax and capital gains tax and allows someone to ask to have the tax debt remain uncollected as long as two important circumstances exist.
The first is that HMRC must have been in receipt of all the relevant information and have used it within 12 months from the end of the tax year concerned.
The second is that HMRC must be satisfied that the taxpayer had a ‘reasonable’ belief that their tax affairs were in order.
So, for those that have underpaid do make your case if you feel that the above concession applies to you. There is also an appeals procedure should your first attempt fail.