Self-Assessment – Revenue in chaos

Tax experts are warning of widespread confusion in advance of this month’s self-assessment deadline after the Inland Revenue inadvertently sent out 800,000 misleading tax statements.

It is feared the error could lead to thousands of taxpayers paying too much tax, and to accountants being inundated with queries from alarmed clients.

As the extent of the problem became fully apparent this week, the Revenue apologised and said it was writing to affected taxpayers and tax agents to clarify the situation.

The problem arose after Revenue computers began producing the latest round of statements of accounts – periodically sent out to self-assessment taxpayers showing payments they have made and those due. Any outstanding tax is shown, together with the date it is due.

Around 800,000 taxpayers have to make tax payments on account which are due twice a year – 31 January and 31 July. Statements issued to this group at the end of last month inadvertently included the amount due in July, but neglected to show the date.

It is feared taxpayers will conclude this payment is due on 31 January, and pay over the total of amounts shown on the statements, rather than just that tax due by the end of this month.

Francesca Lagerberg, technical manager of the English ICA’s tax faculty, said: ‘Quite a few people will be very confused and could end up paying too much tax. Accountants are already under pressure due to this month’s self-assessment deadline and will be fielding a lot of extra calls about this.’

Around three million taxpayers have yet to submit their forms for 1997/1998, which are due by 31 January.

Accountants are under extra pressure as 31 January is also the tax payment deadline for the 1997/1998 tax year and the interim tax payment deadline for 1998/1999.

Letters, page 15.

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