Self Assessment - what's gone wrong here?

Money_Bunny

My husband completed his SA return online a couple of weeks ago on his own account using, I assume, all his own reference numbers.

He had previously, in Jan this year (2013) completed a final SA return for his late stepfather as his stepfather's executor. He paid the small amount due. His stepfather had died in April 2012.

Yesterday he received a statement for the year 2012/13 addressed to him as his stepfather's executor and clearly relating to his stepfather suggesting an amount was owing in respect of his stepfather for 2012/13. This amount was larger than the amount paid in January 2013 (but not by much). The statement also showed the January 2013 amount as having been paid.

This cannot be right, surely? His stepfather was only alive for 12 days of the 2012/13 tax year.

Any idea what has gone wrong? Or in some warped tax-logic kind of a way could this be right?

Savvy_Sue

It doesn't sound right, because when people die they get a full year's tax allowance, so someone dying early in April is unlikely to owe any income tax unless their income in the early part of the year is VERY high.

I'd suggest DH checks his return very carefully and then gives them a call? Or does a return for his stepfather and sees if that sorts it out.

John_Pierpoint

It looks like step father was already part of Self Assessment when he died, and his executor wisely decided to keep it going manually in order to report the final full year of the deceased income?.
Now the system needs to know about the final month (6th April 2012 -> DoD, which it regards as a whole year of tax return).
This should have been done manually by the end of October.
When I was in this situation I was not allowed to do the return on-line and so got fined £100 for missing the manual October deadline. [Naturally I appealed and the fine was eventually cancelled but only because some idiot at HMRC had told me to do it on-line; the rules might have changed to allow executors to use the on-line system but I doubt it].

At the moment your husband is dealing with an automated tax system, which may well think your husband has power of attorney and is simply the agent of the tax paying deceased.

Unlike professional agents, ordinary people don't have a priority hot line to someone intelligent, so I would suggest husband tries phoning first thing on a working day morning and tries to get the "triage" worker to explain exactly what the system thinks the situation is - don't put words in their mouth !

Everything might be in order - but in my case it was a total mess and a phone call was put through to the office dealing with the (deceased) tax payer.
"Instead of us having this three way phone call, cannot I just talk to the person you are talking to?"
[I felt like shouting down the phone "Can I talk to the organ grinder............"]
- They cannot accept incoming calls and will telephone you back within 24 hours.
In the event I had to sit next to the phone for 36 hours, before I got to talk to an organ grinder.

Nip this situation it in the bud, before it develops a life of its own.

nomunnofun

John_Pierpoint wrote: »

When I was in this situation I was not allowed to do the return on-line and so got fined £100 for missing the manual October deadline. [Naturally I appealed and the fine was eventually cancelled but only because some idiot at HMRC had told me to do it on-line; the rules might have changed to allow executors to use the on-line system but I doubt it].

You are right to have doubts as it hasn't changed one bit!

In my case, my client had a massive share portfolio (over 1 million) and chose to depart this earth in July this year. her care home informed the state pension authority who in turn informed HMRC. I had acted for this lady since 1997 but she was completely removed from my list of clients as the 64-8 was no longer valid. I telephoned HMRC who refused to speak to me as they 'were unable to find any records of any agent'. I had still to complete the 2012/13 return, never mind the return to date of death.

It took six weeks for her records to reappear on my client list.

chrismac1

I suggest taking this matter into your own hands and not bothering with "Helplines" as all too often HMRC helplines make a mockery of the word.

http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=x-Y-oBoX_Qs&formid=815

Complete and file an R27 and hopefully all will be well. At the very least any possible fines will be stopped dead in their tracks.

Note that most R27 forms are completed by people who are related to the deceased, within a few weeks of death. Hence on various counts there is no excuse for the hob-nailed boots approach which is the typical way HMRC deal with UK taxpayers in the 21st century.

In fairness, I've done 3 or 4 of these in the past 2 years and they have been dealt with sensitively. Where errors have been made - for example one husband had various "squirrel stores" of investments he'd not told his wife about - the letters have been courteous and informative, rather than the usual threatening and intimidatory drivel.

John_Pierpoint

My initial mistake was writing to HMRC and asking for the "the forms" and then receiving a R27. As the death was at the end of September the July payment had been made TWICE; by the deceased and again by me, because the tax payer was dying in hospital.
By Xmas I had got the income figures together and discovered that the on-line system would not accept me. So I sent in the complete year on the self assessment paperwork and the six months on the supplied R27. That was probably my big mistake, coupled with HMRC's attempts to collect tax arrears, from a pensioner with a gross £1,000 a year PAYE income, by giving him a "K" code.

The outstanding tax situation had been handled "informally", but nobody had reconciled the R27 back to the Self Assessment system. The system just crashed on sending increasingly threatening letters about the failure to pay another JULY payment to the deceased 's address. I had paid the beast in February just to sort out the fine and expecting to get the account refunded and closed when HMRC had reconciled the figures.
It was 18 months, 3 letters then a 24 hour attempt to get through on the phone; followed by a 36 hour vigil next to the phone, after the death, before I finally got the mess sorted out and the refund of overpaid tax.

Hopefully the computerised R27, when processed, now informs the other systems at HMRC that the tax payer is dead and it is time to wrap up the accounts.

[Ironically I was also being chivvied by the Capital Taxes office, anxious to close the file on the IHT account, submitted in the March following the death.]