I owe HMRC money but they never told me!

mybestattempt

PensionsQuery said:

The OP does make a valid point about how well publicised these rules actually are, especially considering fiscal drag is catching more and more people in its net.

A friend of mine (who works in the pensions industry) was also caught out a few years back so it's not like the rules are obvious, and that's before we even get into scandals like the WASPI debacle etc.

In this day and age we all expect a certain degree of efficiency from those we deal with, however the Govt Depts still seem to operate as though it's the early 90s.

You have my sympathy @Bambers29. It's far easier to pay tax when you know it's due rather than it slowly accumulating over two years then demanded at once. 

The 'HMRC should have told me' argument has been heard in numerous HICBC appeals to Tribunal.

The published Tribunal decisions detail all the actions taken by HMRC, since the introduction of HICBC in 2013, to alert all those potentially chargeable, despite there being no obligation to do so.

Flugelhorn

HICBC has been around for over 10 years. For the last couple of years that my family was claiming CB, DH claimed it, it sat in a savings  account and then was paid back many many months later when I did my self assessment. OK so I was doing SA and so the liability was clear - but there was also a lot of chat about it at the time and since and it is often mentioned that reaching higher rate tax means losing some CB 

eskbanker

PensionsQuery said:

One thing I'd hope we could mostly agree on is that there needs to be more effort in communicating these complex rules to taxpayers, to avoid situations like the OPs

Again, an opinion not shared by all!

Flugelhorn

PensionsQuery said:

You have my sympathy @Bambers29. It's far easier to pay tax when you know it's due rather than it slowly accumulating over two years then demanded at once. 

This is very true - I have due to send £2.5K to HMRC before the end of the month but have known this ever since I got statements of interest last April so the money is there, not a sudden unexpected bill

remember my accountant frantically ringing me in mid Jan some years ago to tell me that my tax bill was £25K - she definitely calmed down when I told her that is about what I had guessed it would be and the money had been put aside and was in the bank. 

PensionsQuery

I wouldn't expect taxpayers to be trawling through published tribunal decisions in case anyone else has similar circumstances and has made a mistake one might learn from...


I think both points are valid and can be held at the same time.

Yes, one is responsible for one's own tax affairs.

And, yes, the Government should (whether obligated or not) make it as easy as possible for taxpayers to be aware of their obligations.

HMRC write to each taxpayer with a breakdown of how the taxes are being spent for example - would it be so difficult to include a "common pitfalls" section or FAQ-style info on that letter?

Anyway, I better understand now the risks of derailing a thread so I'll stop here; just wanted to offer some sympathy to the OP as, even though I agree that they have to pay up, I would also feel a little aggrieved in similar circumstances.

Bambers29

Thanks all for the replies. It would appear that the prevailing theme is that I should have known. Obviously, I don't have an accountant or an interest in anything related to tax or finance in general beyond paying the mortgage and other bills (I suspect that would be the same for most people) so I'm still unsure as to how I would have known about HIBC, but, like many of you have suggested, ignorance will most likely gain little traction with HMRC. Mea culpa! I appreciate all of the comments. Once again, many thanks.

Flugelhorn

Bambers29 said:

Thanks all for the replies. It would appear that the prevailing theme is that I should have known. Obviously, I don't have an accountant or an interest in anything related to tax or finance in general beyond paying the mortgage and other bills (I suspect that would be the same for most people) so I'm still unsure as to how I would have known about HIBC, but, like many of you have suggested, ignorance will most likely gain little traction with HMRC. Mea culpa! I appreciate all of the comments. Once again, many thanks.

make sure your friends and colleagues now know, just in case 

Hoenir

PensionsQuery said:

Yes, one is responsible for one's own tax affairs.

This has long been the case. The HMRC don't have the resources to provide advice on a case by case basis. Many people of unwaringly fallen into a hole due to ignorance. Once bitten twice shy as they say. 

Simplification of many things tax related would be the answer. Rather than the layering of more and more complexity. 

Bookworm105

p00hsticks said:

Bookworm105 said:

Sorry but you have "done something wrong" - claimed CB you are no longer entitled to.

High Income Child Benefit Charge: Overview - GOV.UK

Ok, I'm being a bit pedantic, but the OP was indeed entitled to carrying claiming child benefit (and there may be valid reasons for continuing to do so, such as the other parent needing the associated NI credits) on the condition that they may face a tax demand for some or all of it to be paid back, as they have done. .

yes as the only person in this thread to correct someone else you are being pedantic, if they were not "entitled" to it then it would not need to be "repaid"

kinger101

Bambers29 said:

Thanks to everyone who's commented. I appreciate everything you're all saying and I really don't want to come off as being an ignoramus but I would have thought that HMRC would tell you directly if you are supposed to be completing self assessment if you have never previously done so / been required to. Doesn't seem right to me. I have canvassed several colleagues that are in the higher tax band and none of them were aware that they are supposed to be completing SA so it's definitely not just me. As for "like many other laws, not being aware is not an excuse", most laws can be inherently defined on knowing right from wrong. I don't think tax law really exists in the same sphere. I would suggest it's a little more niche than shoplifting or GBH. It doesn't seem strange to anyone that I have 1) never received any correspondence from HMRC and 2) was never made aware of any monies owed from previous financial years. HMRC obviously knew about it so why didn't I until after I'd completed SA. In this instance, ignorance sounds like a valid plea to me. I only know what I know. Thanks all the same. 

I wasn't making any moral judgement when I stated it was the taxpayer's duty to comply with the law.  I was just stating the facts.  Given a lot of media attention has been given to child benefit since the cap of £50,000 was introduced, it seems unlikely that you'd convince them (or a tribunal) that you could have not reasonably know about this, or at least been curious enough to find out how this may have impacted you tax liability. 

The HMRC doesn't really have the resources to engage with every taxpayer to ensure their compliance, but they do provide good guidance online and can be very helpful when finally manage to get through to them on the phone.  They do send notices to file returns to some people, but they cannot do so to every person required to file a return as they could not for example know if you were planning to elimate the HICBC by paying into a SIPP or making charitable donations.

If you do successfully make an ignorance plea, it can only reduce penalties and not outstanding tax or interest thereon.  So you do need to pay this ASAP.  Not doing so will not help your cause.

But the appeal will fail if you simply say you were not aware, or point this back at them by telling them they didn't inform you.  You'd need to establish that it was an unreasonable for you to have either known about the rules, or that this was at least something you needed to research further.