Mistakes by HM Revenue & Customs (HMRC)
HM Revenue & Customs do sometimes make mistakes. Normally, if they have charged you insufficient tax and later discover the error, they will send you a supplementary demand requesting the balance owing. However, under a provision known as the ‘Official Error Concession’, if the mistake was due to HMRC’s failure ‘to make proper and timely use’ of information it received, it is possible that you may be excused the arrears. For this to be likely, you would need to convince HMRC that you could reasonably have believed that your tax affairs were in order. Additionally, HMRC itself would need to have been tardy in notifying you of the arrears: this would normally mean more than 12 months after the end of the tax year in which HMRC received the information indicating that more tax was due.
Undercharging is not the only type of error. It is equally possible that you may have been overcharged and either do not owe as much as has been stated or, not having spotted the mistake, paid more than you needed to. As part of the Citizen’s Charter, HMRC has appointed an independent Adjudicator to examine taxpayers’ complaints about their dealings with HMRC and, if considered valid, to determine what action would be fair. Complaints appropriate to the Adjudicator are mainly limited to the way HMRC has handled someone’s tax affairs. Before approaching the Adjudicator, taxpayers are expected to have tried to resolve the matter, either with their local tax office or, should that fail, with the regional office.
HMRC is, however, getting tougher about mistakes where, for whatever reason, there is an understatement of the amount of tax due. Genuine mistakes will still be excused but individuals may need to convince officials that they had not been careless in completing their return. Otherwise they could be at risk of incurring a penalty. More immediately, the deadline for filing paper self-assessment forms for the 2008/09 tax year is 31 October 2009. Those filing online will have until 31 January 2010.
For further information, see HMRC booklet, Code of Practice 1, Putting Things Right. How to Complain, avail- able from tax offices. Contact the Adjudicator’s Office for information about referring a complaint. The Adjudicator acts as a fair and unbiased referee looking into complaints about HMRC, including the Tax Credit Office, the Valuation Office and the Office of the Public Guardian and The Insolvency Service. The Adjudicator’s Office: Tel: 0300 057 1111; website: www.adjudicatorsoffice.gov.uk.
Other useful organisations Taxpayers’ Alliance has a campaign team of energetic volunteers committed to achieving a low-tax society. It has over 18,000 supporters and is regularly mentioned in the media. For further information, contact: Tel: 0845 330 9554; email: info@taxpayersalliance.com; website: www.tpa.type pad.com.
Tax Help for Older People is an independent free tax-advice service for older people on low incomes who cannot afford to pay for professional advice. If your household income is less than £15,000 a year and you are a pensioner you will qualify for free tax advice from TOP. This organisation offers the service originally provided through the Low Incomes Tax Reform Group. For further information, contact: Tel: 0845 601 3321; email: taxvol@taxvol.org.uk; website: www.taxvol.org.uk.