An unpleasant surprise dropped through my front door yesterday morning. I knew I had several thousand pounds to pay the Inland Revenue for the last tax year, but I thought this wouldn’t come due until next January. The letter begged to differ: I was already behind with the first instalment (for which interest had been charged) and the second instalment was due end of July. When I saw the amount, my eyes watered.
I called the Inland Revenue at lunchtime and the amount was confirmed - it was no mistake. I explained to the tax woman that I didn’t have that kind of cash just lying around. “You’ll have to call our payment help line” she said.
I dialled 0845 366 1204 and got to speak to a calm, assured young woman. I explained the situation and presented my proposal. Twenty percent to be paid at the end of July, twenty per cent at the end of August and the remainder at the end of September (when some savings became due). Doing it this way would be an administrative inconvenience to me of course, and expensive, as the Inland Revenue charge interest on the outstanding amount. Still.
Tax Woman: “What about your saving? On your 06/07 tax return you listed income from savings?”
“Those savings were transferred to my wife. I don’t have any taxable savings.”
“I see. When you discovered you owed tax, you transferred your savings to your wife?”
“Of course not! I only found out I owed tax this morning. My savings were transferred in 2006, when I finally appreciated I was being taxed first on my income, and then again on any interest on savings. Look, I don’t understand what your problem is. I’ve given you a perfectly reasonable repayment schedule - you’ll get all your money by September. Because you charge interest, what difference does it make to you?”
“So you will need to make a full statement of all your income and expenditure.”
“Call me again, and make sure you list all your monthly spending. Shopping, clothes, all utility bills. And I’ll also need a statement of all your assets: car, house, furniture.”
“Excuse me? You want me to put together a spreadsheet with all my assets, and every line item of income and expenditure? Even what we spend at Tesco?”
“We don’t need a spreadsheet and yes, we do need your shopping expenditure. Call me with all this information and we will decide what you can afford to pay us per month.”
At this point I was the very picture of middle-class exasperation and outrage. With voice crackling with emotion I tried one last time.
“ I don’t understand. I already told you I could repay this over the next few months. My proposal reflected the cash flow I actually have. Going through all this stuff will make no difference. In any case, since you charge interest, the present value of the amount you will receive is the same regardless. What is the purpose of this ridiculously humiliating process?
“It’s just standard procedure.”
“Look. Suppose I just ignore what you just said and make the payments I proposed anyway. What happens then? “
“In twenty eight days your case will be passed to debt recovery and legal proceedings will be taken against you.”
“By the time any of that works through, you will have been paid everything you’re owed!”
“I’m sorry, it’s just the standard procedure.”
We wrote a check for the full amount that afternoon, having raided our younger son’s piggybank (with his agreement).
I guess they’ll be exchanging quiet smiles in the office. Result!