Dreaded HMRC brown letter with £783 charge inside dropping on doormats | Personal Finance | Finance

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‘Dreaded’ HMRC letters are dropping on doormats this week with charges which average £783 hidden inside.

The brown envelopes are a hallmark of this time of year as His Majesty’s Revenue and Customs works out who underpaid or overpaid their tax for the financial year just gone.

Life insurance broker LV says the ‘dreaded’ HMRC letters contain information inside about what tax you’ve paid in the previous year.

At the same time, you should receive a P60 from your employer which. It’s vital to keep both documents and cross check one against the other so you can be sure there haven’t been any mistakes with your earnings which could cost you down the line – or possibly even lead to a fine.

If HMRC decides you didn’t pay enough tax – perhaps because you changed jobs, didn’t declare some bank savings interest, sold lots on eBay or had a second job which was declared to HMRC, the Government will then demand a repayment.

Average underpayments of tax are £783 for those who owe money, according to a Canada Life survey.

Of course, you could be paid money back if you overpaid tax, perhaps because you were taxed too much at the start of a new job.

If you’ve checked and double checked it, and your tax code is correct and it matches up with your P60, you have no option but to pay any additional tax you owe or you could face late payment fines and eventually, jail time.

You can opt for repayment plans though and often these will see the amount you’re owed staggered in repayments directly from your salary over the following 12 months.

LV’s Gillian Wrigley said: “Eeryone dreads receiving brown envelopes with “HMRC” printed on them. But they can contain good news as well as bad.

“If you don’t have the money to hand, explain that and they should devise a doable payment plan. It might seem hard to believe, but HMRC is staffed by humans, and if there IS a problem and you contact them straightaway, they will usually be helpful.”

It’s also a good idea to check if the letter is genuine. There are a lot of scams which piggyback off HMRC’s name especially at this time of year, so if in doubt, call HMRC directly on 0300 200 3300 and not via any website or number on the letter, which may have been swapped out to fool you.

HMRC is very unlikely to text you, so again if you’ve received an SMS with HMRC information, call HMRC on the above number instead of clicking links in the text.

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