New SA chaos fears

New SA chaos fears

Inland Revenue processing targets spark alarm about more penalty notice errors. Damian Wild reports.

The Inland Revenue has denied that it has failed to learn lessonsnotice errors. from the chaos that surrounded this year’s introduction of the self-assessment tax regime despite announcing new performance targets that appeared to do little to cut the number of penalty notices sent out in error.

Tax accountants say that, in some cases, as few as 10% of the penalty notices sent out by the Revenue last year to taxpayers who allegedly failed to submit their SA return by the 31 January deadline, were correctly raised.

Now new efficiency targets published by the Revenue a fortnight ago suggest the same mistakes could happen next year. By setting a target of ‘capturing’ 99% of the returns received by 31 January 1999 on computer by 31 March 1999, many tax specialists fear penalty notices will once again be issued.

This year, notices were sent out in February, before returns were fully logged on the Revenue’s computer systems.

The Revenue said this week it logs all SA forms on the day it receives them, which should prevent incorrectly issued penalty notices. But John Whiting, Price Waterhouse head of personal taxation, said: ‘History so far has proved it’s not entirely foolproof’.

Jonathan Bruce, senior tax manager at Ernst and Young, added: ‘Of every ten penalty notices I received (last year), nine were incorrectly raised.’ He said notices were issued in many cases where clients had no tax liability.

Moira Elms, Coopers and Lybrand’s income tax specialist, said: ‘We had a situation where a client received a #100 penalty notice and their return was sitting in a pile.’

A Revenue spokesman said with nine million taxpayers returning SA forms, errors were inevitable. ‘Of course we’re not complacent,’ he added.

Related Articles

Supreme Court rules against Pimlico Plumbers in landmark employment case

Legal Supreme Court rules against Pimlico Plumbers in landmark employment case

1m Alia Shoaib, Reporter
Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

Personal Tax Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

2m Alia Shoaib, Reporter
Rent-a-room relief – the survey says…

Personal Tax Rent-a-room relief – the survey says…

4m Helen Thornley, ATT Technical Officer
What should the OTS prioritise in its review of inheritance tax?

Personal Tax What should the OTS prioritise in its review of inheritance tax?

5m Alia Shoaib, Reporter
LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

7m Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

8m Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

9m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

9m Emma Rawson, ATT Technical Officer