In recent days there have been a number of new stories circling around regarding HM Revenue  and Customs (HMRC) wrongly charging people. We are seeing real cases of errors with our clients relating to HMRC confirming accounts due to be paid by 31 January.

Our tax return reports are built to be as clear as possible as to what needs paying. We then have to explain within the report how the figures due have been calculated, but usually at the very top we state what needs paying in January and what will become due in July.

Our team question the amounts written on the report and ask themselves: “would I be happy paying that if I were in their position?” It’s not something we take lightly.

But of course if HMRC write to our clients saying they owe less than we have calculated I can understand the desire to believe HMRC – we all want to protect our cashflow. But just because we want something to be right, it doesn’t mean it is right.

Here are some examples of the issue HMRC have been having:

Getting account details wrong and issuing refunds to the wrong tax payer

Awkward! If you receive a refund from HMRC that you were not expecting, treat it with caution as it may be the result of a glitch!

Ignoring capital gains liabilities

This is often a large part of the balance due in January so missing this off people’s statements could cause a very large underpayment and subsequently a penalty charge and interest on the unpaid amount. We would hope we can appeal the penalty but the interest would stand. If it took HMRC two years to correct the error, that’s two years of interest you owe.

Forgetting to include payments on account

If you don’t know what a payment on account is I recommend you see our article here as these form a key part of how the personal tax system works.  One client in particular was issued with a three figure tax refund she didn’t expect! When we looked into it she had paid the correct amounts, but her HMRC record didn’t show any payments on account being due in 2019, so HMRC refunded it!

Now we have a process of faff with cheques and calls to HMRC to try and resolve the problem.

I’m sure more issues will come out of the woodwork, but just be aware – it is often best to check with us when HMRC send you something that doesn’t sound quite right.

If you’re not a client of ours, you can get in contact with us at 01474 853856 or discovery@a4g-llp.co.ukif you have any concerns you need our help with (and to take the dreaded tax return off your hands!)

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