Life turned upside down – because of the Taxman's blunder – for a paltry 88 pence!
Last night England 's ITV carried a tragic story. "The Inland Revenue bankrupted me for just 88p . My life was turned upside down and my family almost ended up homeless because of their total and utter incompetence. ", said Matt Matharu , a former cab driver.
For 53 year old Matt , life was good. He was earning almost £50,000 as a director of a graphic design company. His wife, Kate , and their two children, who lived with them, all had full-time jobs.
That was until Inland Revenue, by a mistake decided to wreck Matt 's life. Now he is back to driving a cab, thanks to the taxman.
His problems started after he switched job in 2000 to become a graphic designer.
Tax was deducted automatically from his salary, but although he told HMRC he was no longer self-employed, last year it sent him a bill for £12,000 based on his previous tax records. He told them that there had been a mistake and expected the tax bill to be withdrawn. "You just keep hoping and hoping that someone is going to listen, look at the paperwork you've supplied them, press a button on a computer," he said.
However, Revenue &Customs took him to court and last August he was officially made bankrupt. A month later Revenue admitted it had made a mistake and Matharu's real debt was just 88p .
Matthew Elliot , chief executive of the Taxpayers Alliance , said: "In a court of law people are seen to be innocent until proven guilty, but with the tax authorities they see people as being guilty until proved innocent. You can supply all the evidence you've got, all your salary slips, your chequebooks, literally everything, but the taxman still comes after you."
Matharu was declared bankrupt by a High Court judge in London. He had not even attended the hearing, having been told it would be adjourned as a matter of routine to give him time to challenge the order.
Later, the couple's joint bank account was frozen, their mortgage company took out a possession order on their house and Mr Matharu was forced to quit his job because bankrupts cannot be company directors.
Matharu wonders, "It's the age of the computer, you know Big Brother knows everything about us, so why doesn't he know about my tax affairs?"
With the £12,000 tax bill lifted, Mr Matharu had the bankruptcy order overturned at another court hearing in January.
The mistake is detected. Are they free now? Once you are in taxman's net, you don't go out so easily. The Matharus face another court hearing this month to decide if they should pay the £2,000 Official Receiver's costs for administering the bankruptcy.
Mrs Matharu , 46, a computer software technician, said they had already offered to pay another £750 costs bill "to get it out the way" and the family was now £15,000 in debt because of the tax blunder.
Her husband had to return to taxi driving, knowing their house could be repossessed at any time if they fail to keep up with monthly payments.
To complicate things further, Mrs Matharu is being threatened with the bailiffs for a "self-assessment" tax demand of £1,900. She insists this is another blunder, as her tax is deducted from her salary.
Describing the family's plight, she said: "It's like saying, 'you've had an earthquake – don't worry about the damage it has left behind, the earthquake has stopped now'.
"Well it's not like that. It has left a huge wake of damage behind us and we are really struggling. It almost finished us. But we're quite practical people and we have looked for a solution, but anybody of lesser character, it could have quite easily finished them off, I think."
Mr Matharu has never received an apology from the Inland Revenue.