ISAs face huge tax delay

The Inland Revenue unit charged with policing the government’s new ISA regime has a correspondence backlog of up to nine months, Accountancy Age has learned.

The Financial Intermediaries and Claims Office has yet to reply to correspondence dating back to last July, according to one accountant who contacted the unit to complain about an unanswered letter.

The unit – whose offices are in Bootle in Merseyside, Nottingham, Edinburgh and Worthing in Sussex – deals mainly with overseas residents and registered charities.

It also oversaw PEPs and TESSAs and has now been tasked with supervising the individual savings accounts that have replaced them.

Meir Rosenthal, of the Gateshead-based firm Rosenthal & Co, contacted the unit’s Bootle office last month to ask when he would receive a reply to a letter that he wrote in February on behalf of a client appealing against a late-payment penalty. He was told by a FICO official that the unit had yet to reply to correspondence dating back to last July.

A Revenue spokeswoman played down the problems in the unit, which is the department’s second largest processing centre for self-assessment. ‘They don’t believe they have a problem,’ she said, saying that FICO was meeting a national target of replying to 80% of its correspondence within 28 days. ‘On the rest of the 20% they don’t think they have any particular delays.’

Arthur Andersen corporate tax partner Bill Dodwell said that while the Revenue might legitimately be able to claim the unit was meeting its overall target, parts of the office were not.

‘FICO has been completely snowed under for claims for tax-credit refunds on dividends,’ he said. ‘That part of the office we know is definitely not meeting its target.’

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