I read about my PR buddy’s dilemma on Facebook. She was in shock having received an unexpected – and unwarranted – tax bill for £20,000. I really felt for her.

But Sheila Kiggins’ story does have a happy ending, the taxman finally resolved matters, but only after countless headaches – thanks to the intervention of her wonderful MP James Paice. I thought it was such an interesting story that I asked Sheila to write a guest post to help others who might find themselves in the same unfortunate situation;
Some couples have a baby to try and stave off the inexorable flow towards separation. Fortunately for all the unborn children out there waiting to be brought into the world, my ex and I opted for a puppy. Fundamental disagreements over the appropriate balance between affection, exercise and discipline for 12 inches of fresh-minted dog brought other issues to a head and, five months after moving in together, my worldly goods were in a container just off the A10 and I was staying above a friend’s garage waiting for my house purchase to complete, trying to remember which organsiations needed to be told that I’d moved. Again.  The best part of a year later I occasionally come home to find he has been round with a bunch of envelopes from places I haven’t yet notified. These are usually forgotten subscriptions, attempts by companies to sell me extended guarantees for white goods that went back to the shop after breaking down within a month of purchase, and very occasionally a letter from National Savings. One day in February I came home to find two letters from HMRC.

I know exactly when I opened them because, being a modern girl, I posted to my Facebook status. At 18.49 on 1st February HMRC told me that I owed them £20,000 in underpaid tax.

Once my heart started beating again I read the two letters more carefully. One said I owed £8,500 for 2008-09. One said I owed £11,500 for 2009-10. The £11,500 included the £8,500. So that was £8 grand off the bill in 5 minutes….

Some context: I have been PAYE all my life.  I have never worked for myself. One of the main reasons for this is that I was always incredibly worried that I’d screw up my tax and have to sell a kidney to pay the Revenue. It turned out that Haringey Council had saved me the bother and screwed up my tax for me. I spent 4 years as an elected councillor on that rather unhappy local authority, at a time when I was a higher rate taxpayer, and their payroll had taxed me at the 20% emergency rate the entire time. Now the Revenue had noticed and wanted the other half.

I am no longer a higher rate taxpayer. At the time the letter arrived I was earning £6.10 an hour for a 16-hour week in the Willingham Co-Op, plus making efforts to get up and running as a freelance writer and PR.

What does a modern girl do in these situations? I Googled. Just before Christmas, lots of people had been written to for small sums of tax owing from 2008-9 and 2009-10, two years it seems that the Revenue had taken as gap years while installing new IT systems. Extra Statutory Concession A19 could be claimed in certain circumstances, while in other situations the liability for underpaid tax could rest with the employer rather than the employee.

I put my case together for both of these to apply and sent it off.

The next letter from HMRC added another £1500 for 2007-8.

The fourth letter, which arrived on 26th February, said “please pay what you owe us by a week on Friday. If you don’t, we’ll start charging interest.” Most people who were contacted by the Revenue, including the friend who told me to suck it up and stop whining, owed about £1500, which might perhaps be reasonably expected to be findable at short notice. I wondered if the person that signed this demand had even read the sum being asked for.

Following the instructions under “if you are not going to be able to pay” I phoned them. After 45 minutes on hold I spoke to Kevin and pointed out that it was going to be a bit difficult to get £15,000 together in 10 days. He agreed and asked if I wanted to negotiate special terms. I said no, I’d like my representations to be considered. He said that letters sent in February weren’t being opened until April, and there was zero chance of my arguments succeeding.  At this point I burst into tears, which I assure you is not my usual method of dealing with financial matters, but it had all got a bit too much.

I needed to bring in the big guns so looked up my MP on the Parliament website. There was once a time when I was a middling-profile Liberal Democrat. My MP is a Conservative. I hoped that Mr James Paice would be one of those MPs who regards helping constituents with problems as a non-party-political affair. I also hoped he would be one of those MPs who saw his constituency role as just as vital as sitting in the House scrutinising and legislating, and who wouldn’t tell me that the only way to deal with this problem was to overthrow the Government (I appreciate that this is unlikely from a Tory, but I have it on good authority that this was the standard response of a now-retired Northern Labour MP to constituents asking for help with getting their council houses to be repaired).

Even though it was a Friday afternoon, I got straight through on the phone and spoke to a helpful assistant about the problem I needed help with. My appointment was confirmed by letter and when I got to the meeting Mr Paice listened carefully, took some notes, took some copies of the paperwork and promised to write to HMRC on my behalf.

I got a letter confirming that he’d written; a letter forwarding the acknowledgement from HMRC with a date for when the case would be looked into; and on 3 May a letter saying that HMRC had agreed that the criteria for ESC19 had been met – that’s the criteria that Kevin on the phone told me I had no chance of benefitting from – and the demand had been remitted. All for the price of a phone call and a trip to a community centre for a meeting. 10 minutes at my MP’s surgery saved my life as I know it. As my helpful friend said, it’s only money, but it was a hell of a lot of money that I am no longer in a position to pay. If HMRC had asked for it at the time, which is what they are supposed to do and why they get sent P60s, I would have been able to pay. Because of some interesting life decisions, to find that sum now I would have had to start selling things – and since I bought all of my furniture from Emmaus Cambridge I would have had to sell it several times over.

If you are faced with a massive tax demand and a very unresponsive HMRC, I hope that you too are blessed with an MP who takes his constituency role seriously, and who will take up your case and help you make the right arguments to the right people. If you aren’t, then try your local councillor or the man or woman who hopes to unseat the MP at the next election, because very often they take up casework as a way of building profile in advance of a campaign.

MPs get a bad press. The ones I’ve worked with in my professional life have all been good people trying to make a difference.  And the one I needed help from in my personal life certainly managed that. Thanks to him I can keep my best-beloved BMW 1200 GS (worth £5,000, on a good day). I can keep my vintage Hammond organ (£350 quid, tops).  And I don’t have to remortgage my house – though it is, apparently, illegal to borrow to pay tax bills.

I have retreated back to the world of full time employment. I called HMRC to tell them, and to ask how I could be sure that the situation wouldn’t recur.

“Oh, don’t worry,” they said. “You’re on PAYE. When we get your P60 we take care of it all.”

*How many of us would have thought of writing to our MP if we were in the same situation? James Paice is my MP, and he is a very genuine and hard working Agriculture Minister too.

I’m still waiting for that pillion ride Sheila!