'No offence' is no defence, Mr Taxman

READERS' LIVES: Tax disputes ... early retirement for teachers ... problems with estate agents. Your financial queries answered

I was astonished and then plain angry at a letter I received from my tax office. "Information received in this office would suggest that your tax return is incorrect because either a wrong figure has been entered or a source of income, investment or capital gain has not been declared. Please therefore reconsider the entries made in your return and let me have your comments regarding any discrepancies." The letter went on to say that submitting a return which is believed to be incorrect is negligent conduct. I had told my tax inspector late last year that some further figures were to come. Apart from that, I haven't a clue what the letter refers to. What should I do?

LS, Bristol

Letters like the one you received are not intended to cause offence, according to an Inland Revenue spokesman. In that case, perhaps they should avoid phrases such as "negligent conduct". The problem is that your tax inspector is reluctant to tell you precisely what income he or she believes you have not declared, in case there is more undeclared income that your tax office does not know about. Otherwise, it would be too easy for taxpayers not to declare income and simply to own up to any that the tax authorities happened to find out about.

But that defence does not alter the fact that many taxpayers who receive this sort of letter may genuinely have no idea what they've left off their return. It is possible that you have left nothing off and there is an easy explanation for the "information" your tax inspector apparently has.

In the first instance, you should write back to your tax inspector to say you have no idea to what the letter refers. You should then be given a hint as to what area to look at.

If it's any consolation, you should not initially receive confrontational letters under the new self-assessment tax collection system, which comes into effect in April. Tax inspectors will be able to carry out "enquiries" into the accuracy of tax returns as a result of a tax inspector's suspicions or on a purely random basis. The procedure will be the same whatever the reason for the enquiry and the fact that some will be random should ensure a non-confrontational approach. It remains to be seen what happens.

I'm a member of the teachers' superannuation scheme. I understand that the Government is changing the rules from 1 April. Can you provide details? Are the changes definite or just proposals? Is their implementation dependent on the Government's survival?

M Mattick, Southampton

It will become much harder for teachers to get early retirement from April. A generous early retirement scheme, initially for teachers over 55 and later extended to teachers over 50, was introduced in the 1970s. It was designed to encourage older teachers to retire to make way for younger, unemployed teachers.

In principle there has been no automatic right to early retirement: certain conditions have to be met. But, in practice, teachers applying for early retirement have rarely been refused. In recent years, schools now in charge of their own budgets have had an incentive to encourage early retirement because older teachers can be replaced by younger, cheaper teachers yet to climb the salary scale.

To date, pensions for prematurely retired teachers have been paid by central government. But the cost has been criticised by the National Audit Office. Under a proposed change, local councils will pick up the tab from 1 April. They won't have any extra money to fund the scheme so won't be able to allow as many teachers to retire early. Hence, the rush of teachers applying for early retirement.

Other changes include an end to ill-health pensions for teachers who, for example, return to work as supply teachers. On the plus side, death grants for those who die in service are being doubled from one to two years' pay. And severance pay for younger teachers is being more than doubled.

The consultation period for the proposed changes ended last week. The regulations to alter the scheme are likely to be introduced in the next few weeks. And don't expect a change of government to give a stay of execution to the current system.

"It is unlikely that a Labour or Labour/Liberal government would change the regulations back," says Doug McAvoy, general secretary of the National Union of Teachers. "They would be seen to be acting against the advice of the National Audit Office, which no new government would do lightly."

I am unhappy with the way my estate agent sold my house. Is there an official regulator or watchdog to whom complaints can be directed?

D Wilson, London

There is no statutory regulator, however your estate agent may be covered by a voluntary scheme. The Ombudsman for Corporate Estate Agents covers the 15 largest chains and will handle complaints from buyers and sellers. The address is Beckett House, 4 Bridge Street, Salisbury, Wiltshire SP1 2LX (phone 01722 333306).

Alternatively, your agent might be covered by the National Association of Estate Agents. Write to Arbon House, 21 Jury Street, Warwick, CV34 4EH (phone 01926 496800).

q Write to Steve Lodge, personal finance editor, Independent on Sunday, 1 Canada Square, Canary Wharf, London E14 5DL, and include a telephone number.

Do not enclose SAEs or any documents that you wish to be returned. We cannot give personal replies or guarantee to answer every letter we receive. We accept no legal responsibility for advice.