Taxman's interest rate

meanScot_2

My accountant submitted my tax return for year 2004/05. The figures for tax due were accepted by taxman and tax owing was paid on time in Jan and July 2006. I have undergone a minor investigation by taxman in 2008. As a result I have to pay a further £1600 tax for the 2004/05 year. The taxman has also added over £300 of interest and the full amount is payable within 30 days or further penalties will occur. Is it right to accept the accounts, then to review them and charge interest over 2 years when I was unaware of the extra tax due. I feel that the taxman is acting like a loan shark.

Godders

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Mikeyorks

meanScot wrote: »

As a result I have to pay a further £1600 tax for the 2004/05 year.

Self - assessment means just that. You are expected to get it right .. but didn't. So the interest is just to put you in the position of others who paid their tax in full at the right time.
They didn't 'accept the accounts' - they reserve the right to check, and have done so.

System

MikeYorks is correct. HMRC expect those who have to self assess to get it right and do not investigate every tax return that is submitted. Their computer systems do highlight some obvious descrepancies and they do get investigated. Also HMRC operate a 10% check system where 10% of submitted tax returns are chosen at random for investigation. Interest is charged because the tax was due 3 years ago

If your accountant submitted your tax return I would have expected their figures to tally. Obviously HMRC in investigating that tax year have discovered that something was omitted or claimed which should not have been. If you feel your accountant has not done their job properly then you can complain about them but generally they go on the information provided to them by their clients.