HMRC Aaaarrrrgggghhhh

[Neil ofthe nene]

I have written before about HMRC, this time they have excelled themselves.

I look after the financial side of the house my son lets out. This includes doing his tax return. No big deal as the figures are simple and what with pay and pension (med discharge Army pension) figures being submitted directly from source I though it had got easier.

First problem that I think I reported on was that HMRC stopped taking the owed tax on the property via son's tax code without telling him. This led to an outstanding and overdue amount last December. That was paid as soon as we realised what had happened (and a complaint letter sent). Then in January I was made aware that a further 11p of interest was outstanding. Duly paid and that should have been that.

Then yesterday son gets a letter thanking him for amending his tax return, he hasn't. The letter is saying that he now owes over £1,500 (£1000 owed and £500 on account for the current tax year) and that this must be paid by January 31 2021. Yes that is 19 days before the demand was sent. I have spent all morning trying to figure out how we have got into this position. Finally sorted it but will need a lengthy phone call on Monday.

It turns out that despite twice (August letter and the automatically populated section of the self assessment online form) showing the tax on his pension as paid they are now saying it has not been. In addition the calculation in the letter ignores the money I paid in December and January and is still demanding it. Interestingly his online account does show this as having been received but confirmed the claim that tax on the pension has not.

I will be interested to find out why they have changed their mind on whether tax has been collected or not and why they have demand money already paid. And also why they need money in advance.

I have a suspicion that someone has played around with the figures in retaliation for my, as yet, unanswered letter of complaint. Cynical? Yes.

And yes, my first thought was scam. But it isn't.

 

[Dave]

Good luck with the phone call

I use an accountant, once you find a good one they're worth their weight in pies

 

[Tenacious Sloth]

I’ve had similar problems with HMRC.

They are a bunch of amateurs.

 

[Dave]

The problem with them is they have whittled their staff down too far over the years to cut costs. However what they have also managed to do is have a brain drain where the ones who knew what they were doing, the older end, have left taking the redundancy packages on offer and early retirements.
So you are left with those that can do the job in hand but lack the experience to deal with more complex issues requiring that personal element.
Computer says.... therefore that's it.

 

[Whisker]

I too use an accountant, I can’t be doing with the headache of it all. As a bonus, he pretty much pays for himself.

 

[mickthechippy]

I too use an accountant, I can’t be doing with the headache of it all. As a bonus, he pretty much pays for himself.

being as his fees are tax deductable for a sole trader, I should hope so

 

[Whisker]

He’s saved me a lot more than he’s cost me that’s for sure

 

[spanky]

I had the same problem with HMRC - totally out of date by the time the information was received.

They sent SWMBO a new tax code and a bill, we pay bill. A month on they send another new tax code and another bill (including interest), it's impossible to pay it off!

Phoned them in the end - agreed the balance on the day and paid it off there and then.

Still got a bill for interest - but thankfully only pennies. It's s truly stupid system that destroys any faith in HMRC.

In future I recommend over paying by a fiver or so, just to offset any interest payment accrued during the processing window.

 

[John Step]

When I retired they said I owed £300 ish in tax and my tax code would be amended.
Following year they informed me I had overpaid by £300 and my tax code would be amended.
Following year they informed me I owed £300 and thats right ...my tax code would be amended.
Following year...........they paid me back the £300 via my tax code!

Eventually I heard no more so I think they must have gone into a dark room to play with themselves!

 

[Neil ofthe nene]

Honestly it is not worth me paying an accountant, not me being tight*. My son's tax affairs are very simple. 1 salary, 1 pension, 1 building society account and 1 property income that I keep on top of monthly. Tax return is simple.


*When mother in law died I insisted The Boss and her sister, the only beneficiaries, employed a solicitor to sort out a very complex trust fund (my late mother had a similar investment but not via a trust fund, one letter to Scottish Widows sorted it). Solicitor agreed that it was complex and one wrong move could have created a large tax demand. Zero tax and no hassle for me, well worth the fee. I still have no idea why the financial adviser recommended a complex trust. But then I wasn't consulted at the time. After all what did I know, I only worked in a bank.

 

[Foul hooked]

I have been running my own business now for over 25 years. Accountant used to do it all but when I simplified and consolidated my business interests about 5 years ago, while the accountant still deals with the corporation tax side of things I now do my own self assessments. Relatively straight forward until it comes to actually paying and working out what you actually owe. Because the system requires payment on account for the following year if you owe more than £1000 in the January it gets difficult to keep track of what you have paid from previous years. HMRC website does not help as they never give a simple breakdown of what has been on account, where it is allocated and the balance. After submitting my return it calculated what was owed and then due on account. Demands were sent for the next instalments which I of course paid without realising that they had not taken into account advance payments. I got suspicious last year when they didn’t send a statement demand whereas my wife got one. As I have been slowing down, and the pandemic has taken its toll on my earnings I realised that I was in credit, but still submitted my return in the normal way and it told me I owed around £1600. I applied to defer the on account payments as the web site told me I was in credit by a similar amount and that my income for the year to April 21 would be less than the previous year. I was somewhat surprised when a repayment of overpaid tax for around £3k hit my bank account and my online account said I had nothing to pay for last year. By my reckoning that means they had still been taking payments from me over the last few years such that I was almost five grand in credit! No wonder they hadn’t been sending me statements.
No idea how they have worked it out as I have been through all my returns and payments and whilst I know I have overpaid it is only by about half that.
I will however shortly be the proud owner of a shiny new pole thanks to the nice people at either Maver or matrix but will make sure I leave some of it ready for the inevitable demand for underpaid tax come next January.
A*ses and elbows.