As you know, January is an extremely busy time for HMRC. Unfortunately, this year the additional strain has resulted in a couple of errors that could be quite distressing to taxpayers. If either of these situations apply to you, don’t panic. HMRC are fully aware and will rectify these issues quickly.
Wrongly issued SA late filing notices
The date for filing self assessment tax returns is midnight on 31st January. But HMRC have already issued 653 people with £100 fines for late filing of their 2017-18 tax return. The people affected all filed tax returns for trusts at the beginning of January, way before the deadline.
Initially, HMRC denied the mistake had been made, saying to the BBC: “Any assertion we have sent early penalty notices to customers doing their returns online is false”.
But once the problem was investigated further, they cancelled all the wrongly issued penalties and issued the following statement: “Due to human error in processing some online trust returns a small number of trustees or agents have been inadvertently issued with late filing penalties. We apologise for any issues this may have caused our customers and are writing to them directly to let them know.”
How do the mistakes happen?
This same problem arose during last year’s statement filing period. Unlike individual’s tax returns, the procedure for trusts involves some manual inputting of received information – even though you send it electronically. The late filing button is pressed if there is too long a delay between the receipt of your tax return and HMRC’s recording of your data.
The mistakes can be fixed by HMRC
Dan Niedle is a UK finance and corporate tax specialist at the international law firm Clifford Chance. He filed a 2017-18 tax return on behalf of a trust on 2nd January and was issued with a late filing penalty notice. This is a repeat of the situation he was in last year. His response: “I can happily regard the penalty as a joke – it is clearly invalid on its face. But there are many taxpayers who would be deeply concerned by it. HMRC should be proactively identifying those affected and writing to them asap withdrawing the penalty.”
Someone with expert knowledge understands that errors like this are easily solvable and there won’t be any awful consequences. For other taxpayers, getting any kind of penalty notice from HMRC is stressful. Even if you are able to prove that you completed your requirements on time. Hopefully HMRC will be able to sort out this administrative and system error before next year’s filing deadline arrives.
What should I do if I receive a falsely issued late filing penalty?
Give HMRC a call and they should be able to cancel any wrongly issued penalties for you.
Payment on account figures missing
HMRC are currently addressing a second problem. Some taxpayers are missing the correct payment on account figures from their statements. There are also some cases of absent CGT payments, which have a payment deadline of 31st January. These amounts are not on affected taxpayers’ paper statements or their online Personal Tax Accounts.
HMRC is also fully aware of this problem. On 9th January on the Agent Forum they said: “We are aware of an issue with payment on accounts for a small number of customers for returns from tax year 2017-18. Anyone who is affected should contact us and we’ll put it right.” They have also confirmed that no taxpayer will be charged extra interest because of this mistake.
If your statement is wrong, the most sensible thing to do is contact HMRC as soon as possible. The payment on account figure can be corrected by the HMRC advisor you speak to. It is best to pay the actual amount of tax you owe, rather than the lower (but wrong) number shown on your statement.
HMRC is a very imposing government department, but it is run by people. And sometimes people make mistakes, particularly in high pressure situations. So it is wise to check everything. Check your own calculations and don’t assume that everything you are sent from HMRC is correct, check their figures too. If something isn’t quite right, give them a call and they will help you sort it out.
