The holiday season is over and, as night follows day, tax problems have returned. This time it's problems with the PAYE system, which are resulting in around 1.4 million people being told they have underpaid their tax bills.

The problems have been caused by the PAYE system's inability to keep up with modern working practices. The system was created in 1944 when people usually stayed in one job their whole lives; things are different today of course, with people switching jobs, working overseas or receiving tax credits.

Sudden demands for thousands of pounds from HMRC - and remember many of the problems are because it was HMRC, not the taxpayer, that got their sums wrong - can cause serious cashflow problems for individuals and families, especially those on lower incomes. However, there are cases when HMRC's P800 form (the form they are sending out) can be challenged.

This will occur where HMRC had the correct information about your tax affairs for 12 months after the end of the tax year. When the demands from HMRC relate to the 2008-9 tax year, they could be challenged. While this concession won't affect every case, it's worth a try.

To help, I've drafted the following template letter that can help people challenge the demands under the special concession.

• EITHER: The demand for further tax was issued more than 12 months from the end of the tax year in which HMRC was provided with the relevant information to calculate my tax position correctly
• OR HMRC have allowed arrears to build up over more than one complete tax year, despite all relevant information having been provided to you
• OR HMRC have failed more than once to make proper use of the relevant information provided to you about my income.

I look forward to receiving your confirmation that the further tax liability will be written off accordingly.'