The short answer is yes! Once HMRC have raised a correct tax assessment then you have to pay it. But…and this is actually interesting to tax nerds like me…not always!
Every so often HMRC will rake up the past and send you reminders about tax bills you have forgotten. If HMRC writes to you about an old tax bill, what should you do?
1 – Is the tax bill correct?
The starting point for looking at any tax bill is to ask if it’s correct. Is it an estimated tax bill that needs to be based on actual information instead? Are there adjustments that you need to go back and tell the taxman about?
2 – How old is old?
If old means more than 6 years ago, then there might be something you can do. In the UK there is a Statute of Limitations of 6 years on chasing people for money. For some debts, if you haven’t been chased for 6 years, then the debt becomes too old, or time barred, to be enforced at court. If a debt can’t be enforced at court then you can’t be forced to pay it. Whilst this does not apply to Tax or to VAT, it does apply to National Insurance – because National Insurance is not technically a tax or a duty!
3 – What next?
If you think a debt is time barred then you need to write and explain this. The burden of proof here is on the taxman to prove that they are not time barred from chasing you for payment.
If you’d like some help with a tax matter, as always we are here to help – just get in touch.