​Tax & Benefits Service

​Income tax debt caused by a self-assessment error

A client came to our Tax & Benefits service asking for assistance with an Income Tax debt of approximately £4,000. The client had a long history of mental health issues and had experienced a very unsettled period in her life due to homelessness. Once the client obtained a fixed abode, she started to receive letters demanding payment of the debt but had no understanding of how the debt had arisen.

How we helped

Unfortunately, due to crippling anxiety she had felt unable to deal with the issue for many years even though it continued to cause her a great deal of distress. The adviser’s first step was to obtain authority to enable her to deal with HMRC on the client’s behalf. The adviser then utilised the Voluntary Sector Taxes Resolution Service (VSTRS) to establish the cause of the debt and the total amount owed. It became clear that the total debt of more than £4000 related entirely to penalties for self-assessment tax returns not completed from the previous number of years.

The Outcome

The VSTRS adviser was able to ascertain that due to an HMRC error, self-assessment had been triggered incorrectly. HMRC subsequently corrected the error and the penalties were removed.

The client was delighted and her anxiety levels greatly reduced.