"PAYE Underpayment Collected"

[tinal]

Hi All

Last week I claimed tax back for 2006 and 2007 for myself and husband for health expenses etc. I have now received a very small refund so when I looked online I see a minus figure beside "Paye underpayment collected". So it looks to me that they took this underpayment off what we were due back. Am I right in thinking this? And if I am, can someone expalin what this Underpayment means and how it can happen?

Thanks

t

 

[Graham_07]

You may have had an underpayment in an earlier year, say 2005 which, at that time, Revenue decided not to collect. That can happen for what they consider "small" underpayments. However the underpayment does not go away but remains on record for possible future collection from claims such as you had in 2006 & 2007. If you have Balancing Statements for earlier years check them and you may see what I have described.

 

[hgf]

does this mean, if i have a balancing statement for 2007 stating an underpayment of 126euro for example, which revenue did not propose to collect, it would be pointless claiming back 150 euro worth of medical expenses for 2007 (at 41% tax rate), as the underpayment would gobble up what i am due back?

 

[Towger]

Revenue (unofficially) seem to be tightening up on things such as small under payments and late payments by a few days that they let slip in previous years. Did you by any chance have a Week 53 / Fortnight 27 etc.

 

[ubiquitous]

does this mean, if i have a balancing statement for 2007 stating an underpayment of 126euro for example, which revenue did not propose to collect, it would be pointless claiming back 150 euro worth of medical expenses for 2007 (at 41% tax rate), as the underpayment would gobble up what i am due back?

It depends what you mean by "pointless", ie if you don't claim, you lose your tax relief. If you do claim they may offset it against your previous underpayment, and this underpayment will be partly or fully resolved by the time you next make a claim.