I've got so much to write about. My dalliance with the Treo 700W before deciding XV6700 was the better choice as a broadband-equipped smart phone. Loving my new Swatch SPOT watch, as I showed Robert Scoble last week. But I'm diving back in to blogging with everyone's favorite subject, taxes. Her Majesty's Revenue & Customs department has issued me a final demand for £111 pounds that I apparently owe it from 1999, with the threat of court action if I don't pay up. Gosh, I didn't even know I owned it this princely sum -- and I'm guessing thousands of other people got similar rude, out-of-the-blue demands like I did yesterday.

I'm self employed, so I pay what are known as Class 2 National Insurance Contributions, about £10 each month. This is in addition to the 1 percent of my income that also goes to National Insurance when I do my annual taxes. National Insurance, by the way, is my future national pension plan. When I retire, it will probably pay me £10 per month in benefits :)

I've been paying my contributions without fail since I first came to Britain in 1997 (and no, I don't also have to pay US Social Security taxes, though I do pay US income tax. I'll cover the joys of dual taxation and tax treaty allowances in a future post). So I was more than surprised to get this letter yesterday informing me that I'd apparently not paid between April and August 1999.

Moreover, this opener to the letter really bent me out of shape:

Final Demand for Class 2 National Insurance Contributions

We have checked our records and although we have already reminded you about this debt, you have still not paid.

Oh really? I'd never received any notices of this before. So I picked up the phone to call the contact number and found it engaged. I tried again and again for the next half hour, and the line was constantly busy.

That was odd. One thing I'll say for the UK government agencies. They generally answer their phones quickly.

I dug up a different number to try and quickly reached someone in another department. He was really helpful. He said he was aware that the phones for this collection department were having problems. They seemed to be getting a huge number of calls coming in, which he suspected was due to a batch of collection letters that went out. Those letters went to anyone who was found to be owing over £100 to the Inland Revenue.

How did I get to be included? I pay by direct debit, so I pay automatically each month. The person helping me said that I switched to this method back in 1999, from my previous method of paying quarterly by check. When I did this, the revenue apparently failed to collect a couple month's worth of payments from me. Moreover, this is apparently pretty common, he said. Hence my debt.

How come the Inland Revenue never told me this? The person helping me said he shows that I got a letter in August 1999 and a follow-up letter in March 2005. If they went out, they were never received. I have other letters from the Inland Revenue, during this period, but no notices that I owed money. For example, any time my Class 2 contributions were changed by some amount, the Inland Revenue sent me a letter. But I have never, ever been told that some payments were missing in 1999.

So to recap, about six years ago, the Inland Revenue allegedly failed to collect Class 2 payments from me. It then took all this time to finally get around to making a final demand without me ever having received any earlier demand.

Frankly, I don't know that I trust it. The Child Support Agency has had a string of problems with their own computer systems. I suspect the Inland Revenue may be having similar problems. We'll have a pretty good idea shortly. If a wave of letters really did go out yesterday, many more people other than myself are going to be ticked at the tardiness in the Inland Revenue's notification system.

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