Five FAQs on income tax

Is income tax payable on all the money I earn?

No, as you have what is called a personal allowance. This allowance is the amount of money you can earn before you have to pay any tax. The current personal allowance is £7,475 (May 2011) and is assessed each year when the Budget takes place. If you think you are being made to pay tax on your income that you should not have to, consult with a solicitor about your rights under income tax laws.

Could HMRC sue me for any tax that I have not paid?

Yes, and this could be for a very small amount of tax. Currently, HMRC could even make you file for bankruptcy to recover any income tax they allege you owe from £750 upwards. If you are in this situation, it is vital to get legal advice from a qualified personal tax solicitor.

Can I sue my employer if they have not been deducting enough income tax from my salary?

Your employer should be operating their PAYE (Pay-As-You-Earn) system in accordance with all tax laws. If they are not, you could have grounds to sue them for compensation. Contact a solicitor and outline your case. The more evidence you can present to your solicitor the stronger the case they can build against your employer.

Is it my responsibility to calculate my own tax?

If you are self-employed or run a company, you, and not your accountant, are ultimately responsible for your tax affairs. If for instance, your accountant was falsifying your tax records, you could sue them for damages. In these cases you must have the support and representation of a qualified solicitor.

How can a solicitor help with my income tax?

Each year HMRC randomly chooses a number of people for a tax investigation. If you are chosen and HMRC finds that you owe additional income tax and you disagree with their assessment, consult with a solicitor as soon as you can. Together with your accountant, they can help you build a case against HMRC about the income tax they allege you owe.

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