Cancelling debt and building confidence

In early 2023, Katy, a dedicated care worker from Southwark, found herself facing a financial crisis. She had an unexpected tax debt of £9,656. Her annual income was £12,000, earned through a precarious zero-hours contract. With no savings and no clear way forward, Katy was overwhelmed and deeply anxious.

An employer mistake

Katy had always trusted that her taxes were being handled correctly. She received payslips and assumed everything was in order. But when she took on a second job between 2018 and 2022, a mistake was made: her Personal Allowance was applied twice. This meant that she had been underpaying her Income Tax through PAYE, and through the years a debt was mounting up without her even knowing.

Finding help

Katy was referred to us from Citizen’s Advice and spoke to one of our expert tax volunteers. She Katy explained that she didn’t know how taxes worked and that she assumed that she had been paying the right amount through her salary.

Making an appeal

We appealed the tax debt with HMRC but it wasn’t accepted. We didn’t give up. We went back and appealed on the grounds of hardship. It was successful. Nearly £10,000 tax debt was gone.

Moving forward

Our volunteer called Katy with the news. She was enormously grateful and relieved to have such a heavy financial burden lifted.

Not only that, but Katy now has a much better understanding of her taxes, which she can take forward into any future employment.