PracticeConsultingTax errors backfire

Tax errors backfire

Cost of self-assessment rises again as tax agents' fees are lumped on the Revenue. Jon Bunn reports.

The Inland Revenue could be saddled with an enormous bill for the extra tax agents’ fees caused by its mistakes in the processing of self-assessment forms.

With less than two weeks until the submissions deadline, a mounting number of taxpayers have complained they are incurring increased accountants’ fees because of Revenue mistakes.

But it emerged this week that some of those who have sought redress from the Revenue, which last week suffered a major self-assessment computer crash, have been promised a pay-out – assuming that the taxman’s error is ‘serious’.

A Revenue spokesman said: ‘It depends on the circumstances. But our code of practice indicates that conciliatory payments can take tax agents’ costs into account.’

The value of pay-outs could be substantial, according to experts. John Whiting, Price Waterhouse’s direct tax head, said: ‘There are quite a few cases where the client has received their statement, decided it is wrong, then called us up to complain. We could spend hours re-calculating the payment, make a few calls to the Revenue, maybe even exchange correspondence.

‘What happens when we bill them and they discover it costs #2,000 instead of the expected #1,000? Should we refer them to the Revenue?’

Mark Lee, tax partner at BDO Stoy Hayward, added: ‘This could place an enormous burden on the Revenue, which is already in a state of mayhem.

You can almost envisage the setting up of a refund centre, like London Transport’s.

‘Certainly it will be critical to find a way of guaranteeing consistency in the treatment of claims. It is going to be costly in terms of time and money.’

Lee also expressed concern about the payment reminders which the Revenue is sending to people whose returns have not yet been processed.

‘The reminders state that the balance of payments for 96/97 should be paid by 31 January,’ said Lee. ‘But they don’t say anything about the payment on account of half of the estimated tax for 97/98.

‘I am worried that large numbers of people will be unaware of this requirement, and will end up paying interest as a result.’

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer