Tax agents ready for penalty battle with ‘chaotic’ Revenue

Tax advisers were preparing to do battle with the Inland Revenue this week as almost 700,000 #100 self-assessment penalty notices were sent out to tardy taxpayers.

Agents claimed the Revenue is surrounded by ‘chaos and confusion’. They also accused tax collectors of acting unfairly by penalising taxpayers who returned correct forms a day late, yet giving extra time to those who filed grossly incorrect forms early.

They warned the appeals system would become clogged by appeals as taxpayers disputed penalties. Elizabeth Filkin, the Revenue adjudicator, told Accountancy Age she is expecting an increase in complaints.

Confusion grew this week as the Revenue admitted over-crediting 250,000 taxpayer statements, and needing to close its computer system in an attempt to solve the problem.

Jonathan Bruce, a senior manager with Ernst & Young, said: ‘If you worked really hard, got everything right, but returned the form a day late you get a penalty. But if you put just your name on the form, paid some tax and returned it you get away with it.’

Richard Shooter, chairman of the English ICA’s self-assessment monitoring group, said: ‘We hope the Revenue issues penalty notices on the correct basis. There will be a lot of appeals if the Revenue fails to go further than its very limited reasonable excuse list.’

A Revenue spokesman said: ‘We’ve set out what is a reasonable excuse and we can’t accept anything else. People will not be allowed to appeal because they found the form too hard.’

Related reading