Persistence Pays Off For Driving Instructor
A big thanks to G for letting me use this correspondence as an example.
I am a lone driving instructor and I have recently had my self assessments investigated by the local compliance officer.
It appears that I have not been working out capital allowances correctly (depreciation on my car) I have always found this complicated and as a result I have visited my local tax office (now closed) only to be given the wrong information.
I have also included letters with my tax returns to ask if I am doing things correctly but have had no response. I have now been hit with a bill of £3,900 which I am going to struggle to pay.I contacted the payment office this morning and paid £900, all I can afford as business is very slow.
I was then told that this was not enough and that I must pay more. They gave me the debt line number and I came off the phone in shock and distress. This prompted me to contact an accountant (something else I can’t really afford) and she has offered to have a look at some of the paper work for me. In the mean time I would welcome your thoughts.
If you are not disputing the amount owed (are there penalties that can be mitigated?) HMRC will certainly be looking to get the full amount owed over the next 12 months.
I’d divide what you owe into 12 and pay that amount per month, don’t wait to agree it with HMRC, set it up now.
HMRC divide people up into Can’t Pays and Won’t Pays. You say it will “be difficult” for you to pay that makes you the sort of person who has the money, but would rather not give it up. You have to tell them I can’t pay X but I can pay Y per month and I’ve already set that up.
If they are funny with you remind them that you’ve just paid the best part of a grand and that they’ll get the rest within 12 months.
HMRC should back off if you do this.
I hope that helps.
Thanks for your reply.I have given details to an accountant to make sure the final figure they are asking for is correct.
Their final statement and summary was like everything else very confusing and unclear. Then I will take your advice and split the payments.
A part of me wants to take this further as I am angry that they did not respond to my requests to check my figures and let me know if I was working out capital allowances correctly.
Let me tell you this: you are not alone.
HMRC make this really complex system then tell you it’s easy, then don’t help when you ask for advice, then clobber you when you get it wrong.
What you are going though is text-book-typical and totally outrageous.
Turns out that HMRC make the system SO complex that even they don’t know what they are doing!!
Our accountant has discovered that the compliance officer made so many mistakes that I am in fact owed £1,500 rather than me owing nearly £5,000 which HMRC were asking for. (The amount initially went up!! from the £3,900 as I stated in my first e-mail to you).
I find this really disturbing,how many people are just paying the bill without question!!?
Thanks for keeping me in the loop. From what you’ve said I’d consider billing HMRC for your costs on this – as they were so clearly in the wrong.
Well done in being so persistent.