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19 May 2011
THE TAXMAN HAS been sending out threatening letters to businesses that owe no money, Accountancy Age can reveal.
The letters inform businesses that their "outstanding tax debts" have been transferred to the HMRC's Distraint Department "to list your goods so that they may be sold at a public auction". The businesses are advised to call a telephone line or pay the full outstanding amount immediately.
Accountants have highlighted that these letters are being sent to clients that owe nothing.
Paul Aplin, partner at A C Mole & Sons said that his clients have begun receiving these types of letters in the past few months.
He commented: "The thing that is missing from the letter is the amount of the debt that has prompted HMRC to consider such serious action. The figure is, in fact, nil."
An HMRC spokesman said that these are automatically generated letters and are sent out when there has not been a nil-payment submission. The letters were being sent out because HMRC was becoming more efficient in chasing debts, he added.
Aplin remarked: "They have a point in so far as you have got an obligation to tell them there is nothing owing.
"My problem with that letter is that it is very heavy-handed. How can you send out a letter saying we are sending people out to mark goods for auction if you do not know the debt you are going to collect is?"
Receiving a letter like that could be a "pretty distressing experience", he said. "I'm quite happy for a letter to say ‘if you do not put in a nil return, we can assume you owe tax and then this kind of action could follow'. But to go straight to 'this has been passed to' and 'it will be dealt with straight away' is disproportionate."
Ellen Green, an independent accountant, said that several of her clients had received letters despite not owing anything.
When she called the helpline, she was told by call centre staff that there was a lack of morale in the front office as a result of the problems the letters are causing. She was also told that contact names on the letter were made up.
"It comes out of the blue. There is no way of dealing with this. You cannot pay it because there is no liability and when you call, it usually doesn't answer," she added.
The Daily Mail last month reported that individuals are receiving threatening letters from HMRC about outstanding payments, despite having arranged to pay debts off.
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Briefings
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Visitor comments Add your comment
Not surprised
Not surprised in the slightest. Made a payment under a wrong reference when the usual accountant went off with stress. Was chased for non-payment, it became obvious what had happened and the Collector said he would get the payment transfered to the right account.
Now at the year end getting a demand for around £10k and threats when they actually owe the company £75 for an online filing incentive that wasn't taken into account. Apparently it takes a long time to sort (after a half hour phone call to the office concerned they have to make an email request for a transfer to someone else at HMRC). It isn't good enough that they're so slow to correct mistakes. I admit there was an error on the company's part but they've not tried to do anything about the apparent over-payment to an account where a P35 was submitted and the scheme closed - they ignored that which would have highlighted the problem much faster. Always threats and slowness to sort.
Posted by: PAYE Nightmare, 20 May 2011 | 11:52
thats just the way things are going
A deliberate waste of everyones time whilst if they see deliberate evasion the action is to look the other way ! HMRC are a complete discrace and not fit for purpose.
Posted by: Spike, 20 May 2011 | 12:31
Penalties
This kind of problem (and many others) will only be resolved when penalties (and interest) are paid to the taxpayer by HMRC when taxpayers have complied with their statutory obligations.
More and more we need a level playing field between HMRC and its "Customers"
Posted by: T M Guy FCCA ATII, 20 May 2011 | 13:14
nil balances
Once upon a time the software would have asked the question 'balance = 0?' and then skipped to the next reference.
Is a non-business person writing the system specifications these days?
Posted by: Mike, 20 May 2011 | 15:59
excellent disgrace @hmrc
very costly i.t. online filing, user unfriendly useless systems; some staff do not know even the meaning of 'paye'!!!thus irritating more, @ their maladministration & incompetent catalogue of errors or mistakes. high time 2 privatise hmrc 4 everyone 2 enjoy vfm/tqm-value4money @total quality system @ 24/7. much cheaper in the long run 4 this coalition 2 pay hmrc army of staff golden handshake even by instalments although same but quality hmrc staff shall be employed privately 2 only then generate good practice!!! omg
Posted by: fa, 21 May 2011 | 10:28
If you get one - send in a FORMAL WRITTEN COMPLAINT
Until the smarmy head honchos can no longer sit in front of the legislators saying that all is well, nothing will change.
So rather than grinning and bearing it, we accountants have got to start demanding a level of service from HMRC that our clients demand of us.
Complain and keep complaining. It is the only way that the tangible third party evidence will accumulate that the current system is not fit for purpose.
I personally have 3 written complains that are still at the pillar to post stage after 45 days.
That and I've made a point of copying in the complaints to any sections of HMRC (CT in particular) who may ask clients for money that other bits of HMRC already have.
Divide and conquer. 'tis the only way.
Posted by: Eleanor, 21 May 2011 | 20:05
HMRC Harrassment
Harrasment by a Creditor of a Debtor is a VERY SERIOUS CRIMINAL offence.
If I ever receive such a letter my first action would be to take it to the Police and insist on an arrest warrant be issued for the Head of HMRC.
Posted by: Eric Walton, 02 Jun 2011 | 17:28