The Inland Revenue has come under further attack over its handling of this year’s personal self-assessment round, just as it finally moved to settle some of the rows thrown up by the forthcoming introduction of corporate self-assessment.
A staggering 96% of ACCA members said this week they had experienced problems with personal self-assessment, most due to breakdowns in the Revenue systems.
Almost 60% of members had received incorrect tax demands, while over 40% had suffered lost returns or faced Revenue staff unable to deal with technical queries.
ACCA tax specialist Chas Roy-Chowdhury said: ‘This is almost total failure and it is clear that the Revenue embarked on a new system without adequate IT support.’
Others blamed staffing problems for failures. Under self-assessment, a firm can make a single tax payment for the practice in the name of one partner if it sends the tax details and reference numbers of the remaining tax partners. The tax payment is then re-allocated between partners before any more statements of account are issued.
But Colin Ives, a tax partner at Smith & Williamson, said partners in professional practices had received demands for tax they had already paid, through a single tax payment.
‘I know of three practices where this has happened and I think the problem is a staffing one,’ he said.
The renewed criticism came as the Revenue began to deal with a deluge of requests from companies wishing to join its long-awaited group payment rules for corporation tax self-assessment.
Under the new rules, groups of companies will be able to account for quarterly instalment systems under CTSA on a group basis, instead of company by company.
This means they can forecast their profits at the group, rather than the company level, which should reduce their exposure to interest penalties on underpaid tax.
Groups with accounting periods ending 31 December 1999 wanting to take advantage of the new system have been asked to contact the Revenue by 9 April, though those affected by CTSA with accounting periods ending before 31 December will be unable to take advantage of the rules.
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