My wife filed her tax return late last year on line at which point it calculated pretty much a zero increase in tax increase/rebate. However about a few weeks later she received a cheque for approx £1000 saying they had recalculated her figures and was due a rebate.

Yesterday she received a letter saying she owes them £700 and it is accruing interest charges! No apologies that they had calculated it wrong etc etc. Obviously she is going to contact them, but how does she stand legally, or can the Inland Revenue do what they like ie make big c@ck ups and still demand money back?

Ta

are you sure the two are linked – there was a huge issue with historical tax charges a few months back as they’d calculated previous years incorrectly – is the charge for the same year she got the rebate or is it for a previous one(s)?

Go for an official error approach, which will stop the interest. You’ll need to provide copies of correspondence to the inspector.

There is no information on the letter other than the bit about charging interest, but she will be contacting.

Most of her tax is through PAYE, the only other bit is income from one rental property and then some occasional payments related to her work that are not taxed. Doing our own very crude calculations we do think she has paid up what she is due to pay.

It appears that they become quite inempt when you do not have very simple tax affairs. They made a mess of my returns 3 years ago as well and I ended up having to go in and sit down with them and go through everything, they really didnt have a clue!

My wife in same boat, but think no extra income and they want £4600! She finally spoke somebody in paye dept Friday who knew arse from elbow. Said but in appeal letter straight away to stop anything proceeding and then investigation will happen. In letter state is employer error as she provided them all info so up to them. Also hmrc issue annual update of tax code to employer and up to them to implement it.
For that ‘low’ an an amount they are planning adjusting peoples tax code for coming year to recoup money but as said letter should halt any proceedings until reviewed.
Also send it registered as our first letter has allegedly never been received so nothing being done and wife got scary we want all our money now letter last week, fun times.

for the last three years when I do my SA online and then pay my due tax, it then says I am due a rebate of the same amount as I have just paid, so I am currently ‘owed’ the tax I paid this year and last year.

My advice would be to get an accountant. For what it would cost to do a simple return such as your wife has, it is well worth it.

My ex, over a 3 year period, was somewhere in the region of £4k net better off compared to what the taxman first demanded. She was PAYE too, with no additional income!!

i had that once. £3500 out, then wanted £3800 back. Ouch.

I’d cleared a credit card with the £3500 too.

Bad times.

Have an accountant now 🙂