This guest post is by TaxHelp for Older People (TOP), a charity offering free tax advice to older people on incomes below £17,000 a year. The Helpline number is 0845 601 3321.
As the new year starts the 2010/11 tax year draws to a close, so it’s a perfect time to get your financial papers in order. You never know, it may stop you reaching for that forbidden chocolate bar!
Some of you may have received a tax calculation before Christmas. This would have been a P800. HMRC reconcile their records each year starting in September, finishing towards the end of December. The calculation will be for the 2010/11 tax year.
As always we encourage you to check the information given on the calculation very carefully. We have seen cases where people have received large refunds only later to find out that their state pension had been left off the calculation and that their tax had been ok all along.
We also see the opposite scenario where incomes or savings interest are shown much higher than they actually are, informing the recipient that they owe vast amounts of tax, which when checked is just not the case.
For those who find they do actually owe the money, all is not lost. Think about why it has happened.
- Have you kept HMRC informed of any changes like new pensions or jobs?
- If you have changed jobs, did your employer do their bit correctly?
- Have HMRC kept you informed by sending coding notices?
- Have you reached state pension age or 65 and have not received a P161 coding form from HMRC?
If you feel you have acted correctly, challenge HMRC and ask for your case to be investigated. The main tax charities can advise you on how to do this, or visit the Low Incomes Tax Reform Group website www.litrg.org.uk where full guidance is posted.
Persistence pays with HMRC. Often standard letters are sent out and people give up where the second letter will get the required investigation carried out and a good result achieved.
Do you still need to file your tax return? If HMRC have sent you a notice to file for 2010/11 it must be with them along with any tax due by 31st Jan 2012.
The only way to avoid the £100 late filing penalty is to file online – the paper deadline was 31st Oct 2011. Remember it takes 7 working days to get your activation PIN from HMRC.
Moving onto 2011/12, why not get a folder ready so that when your end of year information from employers, pension providers and banks/ building societies arrives you can file it all together? If nothing else it will keep your tax adviser happy.
Once you have all the information collated, it will be possible to check if your tax was correct. You will be ready for the HMRC reconciliation and be aware if money is owed or a refund is due. If HMRC owe you a refund, you may not want to wait till September. You can contact them and ask for it earlier.
During February you should start to receive your coding notices for 2012/13 but we can discuss this next month!
Still with us? If you need any help, information or advice on taxation and you earn less than £17,000 annually, then please get in touch with us via the TaxHelp for Older People website or give us a ring on the Helpline: 0845 601 3321.