Has HMRC got the right to behave as below?

snowshine

I routinely send my tax return in paper format within the HMRC deadline. ie: By August of each year my paper format is sent to HMRC.

In the Tax year 2011/12 [last year] Tax calculation, HMRC made an error in calculating my tax. This transpired to be a fault on the part of an employee from HMRC when entering my information from my paper document into their computer system. This came to light when HMRC compliance division contacted me to inform that they have commenced an investigation to identify if

1.Have I omitted an entry about my company car -tax in benefit amount. [I could identify from my P11D form provided by the organisation I am working for]
2. If it was an omission on my part HMRC wanted to know the reason for the omission.

The letter goes on to inform me of my rights and I will have to pay the outstanding tax with interest and a penalty for the error. They expected a reply within 30 days of the date of their letter.

It was rather threatening in tone to say the way I felt.

I replied on the same day as I received the HMRC letter. In that I brought to their attention
1.My tax returns are always sent in the paper format

2.I did not make an error on entering -I have a copy of the tax return in it clearly I have entered the company car benefit as was typed in my P11D form.

3.I contacted the HMRC on the phone number as stated on their inquiry letter and was told by the HMRC spokesperson that the error is appear to originated from an HMRC employee on entering my details on the Inland Revenue's computer system.

4.Spokesperson suggested me to put the facts in writing with a copy of my returned "Tax return", which I've done.

I had a call yesterday from Tax office [Compliance division Tel; 03000 555 xxx -a person by the name......]. She acknowledges after she'd verified my information the fault is not mine but the HMRC's. She said that I would not be charged a penalty for the said error in underpayment of my tax but I will still have to pay interest on my unpaid [underpaid] tax.
I am only too happy to comply with their demand for the payment arising from underpayment but very mystified and not happy to have to pay interest? The interest is about £22.00 she said on the phone.
Can HMRC behave in such highhanded manner? What do you think?

in_the_Cotswolds

Unfortunately HMRC are a law unto themselves. From 2007-2011 they managed to get my tax wrong. They sent me a letter saying I owe £3355.46 (can't remember the correct figure) we want!! They then changed my tax code where I at one time paid £100 per week in tax alone. Considering my gross wasn't even £400pw.

Their attitude stinks. Sorry it's our fault but you have to pay + interest. We are easy targets, if you owe millions of pounds it will be wrote off.

That's why I support company's like Google, Starbucks and Amazon because HMRC can not do anything about it.

dori2o

The correction to the return doesn't change the due dates of payment. Therefore the due date for tax due for the 2011/12 tax year is 31/01/2013. If this correction increased the tax liability for that year then interest is automatically charged due to the outstanding balance being due after 31/01/2013.

Also, you need to consider the fact that HMRC sent you a calculation once the return had been processed. it is your responsibility to check that this calculation is correct based on the information you hold

You do however have the option of writing in to formally object to the interest charge, giving you reasons why you believe the charge is not due.

agrinnall

Clearly you can use a computer as you've posted here. So why can you not register for SA online and complete your return electronically, rather than on paper? That way there is no transcription of data and therefore no possibility of error other than by yourself. You can also see the amount that you owe/are owed and the calculation that has been done to arrive at that amount. It's a no-brainer really.

chrismac1

I agree the last post for the following reasons:

1. HMRC never deny receipt of electronic submissions. They routinely deny receipt of all other forms of communication, including recorded delivery mail, in my experience.

2. As the last poster pointed out, the frequency of HMRC error is massively higher than anything a commercial organisation would get away with and survive for long - other than possibly a bank. Electronic submission at least means the error is yours!

earthstorm

I agree with that last statement

Just look at how many times in the news we here that XXXX company has debts of xxxxx million ( i bet most will be owed to HMRC) and yet they are still trading. If we owed HMRC a few hundred they would have us in court and declared bankrupt, yet these large companies get away with it.

Vectis

Why not simply contact HMRC and say you don't think it's reasonable to pay interest due to their mistake (if it was their mistake)?

Guacamole321

I would recommend contacting your MP with all the details and asking if he/she would advocate for you. I had to do this last year, when HMRC started demanding £1000 underpaid tax from me (the underpayment had arisen through an employer apparently not deducting enough from me one year) and they were being quite unreasonable and wanting the payment within 30 days, even though that would have been a whole months' wages from me. Once my MP got involved, they were suddenly a lot more helpful and reasonable.

Pennywise

No need to escalate at this early stage. The interest is generated automatically by HMRC computer.

Just write to them, lay out the circumstances, and ask for the interest to be written off. Almost certainly, they will write it off.

It's if and when they write back refusing that you take things further.

zygurat789

Pennywise wrote: »

No need to escalate at this early stage. The interest is generated automatically by HMRC computer.

Just write to them, lay out the circumstances, and ask for the interest to be written off. Almost certainly, they will write it off.

It's if and when they write back refusing that you take things further.

As I undestand this the interest is on unpaid tax that was never due, was created by an HMRC error and has now been withdrawn.
In which case to leave rthe interest, however created, unwithdrawn is wrong. HMRC would issue a penalty and a fine for this if a taxpayer did this.
In these circumstances to expect the taxpayer to incur more expense and time pointing out HMRC's mistakes to them is patently wrong.
Is it any wonder that everyone, except employees, hate HMRC
Perhaps we should dump all the HMRC statements into our local harbour or storm Somerset House and see what comes of it.

agrinnall

zygurat789 wrote: »

As I undestand this the interest is on unpaid tax that was never due, was created by an HMRC error and has now been withdrawn.
In which case to leave rthe interest, however created, unwithdrawn is wrong. HMRC would issue a penalty and a fine for this if a taxpayer did this.
In these circumstances to expect the taxpayer to incur more expense and time pointing out HMRC's mistakes to them is patently wrong.
Is it any wonder that everyone, except employees, hate HMRC
Perhaps we should dump all the HMRC statements into our local harbour or storm Somerset House and see what comes of it.

Well yes, in your ideal world it wouldn't have happened, but given that it has Pennywise's suggestion seems like a simple first step to get the issue resolved, which for sure won't happen if the OP does nothing.

And I'm not clear how HMRC will be impacted by storming "a major arts and cultural centre in the heart of London"?

http://www.somersethouse.org.uk/