Case study: Pauls’ tax mix-up
When a brown letter arrived telling Paul that he owed late filing penalties of £1,300 he had no idea what to do next. Paul was in employment and in receipt of universal credit, without any spare money to cover this tax bill.
Paul was particularly anxious when it came to using the internet to manage his taxes. Four years ago he had been scammed – all of his money was drained from his bank account. He tried logging into his HMRC account but was unable to, scared that he would click the wrong thing and get scammed again. It took him a while to seek help as he wasn’t sure which organisations he could trust.
He phoned Tax Help for Older People and spoke with us in January, telling us about his late filing penalty and mentioning that he believed his tax code was also wrong. He sent copies of his papers so that we could investigate.
Paul had previously been self-employed, ceasing this in 2020. He was not aware that he had needed to file a tax return for the year 2020/21 having earned only £902 in that year, nonetheless a tax return was needed and without its submission the penalty had been issued.
We worked with him to bring his record up to date and submit an appeal against the late filing penalties of £1300 which was successful.
We also rang HMRC to check his current tax code and it discovered that his current tax code was incorrect due to a system error. Paul’s account had been merged inadvertently with another taxpayer. As a result of our call, his current tax code was corrected which means Paul now has the correct tax code and has less tax deducted each month and therefore much needed extra take-home pay.
Paul got in touch to say: ‘thank you so much. It is most appreciated. I didn’t know where to turn and thought I was going to have to pay an accountant to help me to appeal as the form made no sense. Many thanks once again for your valuable help.’
Thanks to the support of Tax Help for Older People, Paul is in a considerably better situation. He does not have to stress about paying a tax bill that he cannot afford, he has a clearer understanding of his own tax situation, and we have eased his personal financial burden. This is the difference that tax advice can make, to those on a low income.
