Compensation for HMRC errors
One of my clients has just received a £400 penalty notice for not filing a P35. They chuck these letters around like confetti at this time of year and a high percentage of them are always wrong. Needless to say he was not very pleased. The tone of his e-mail was distinctly stroppy. Thing is, I DID file his PAYE returns on time and have the confirmation e-mail from HMRC to prove it, dated 9 May. And it wasn't a test transmission. Also, looking at his PAYE record on the HMRC system, it confirms that they were submitted on 9 May.
I want compensation for this but as I understand it you can only claim for additional fees charged to your client as a result of their errors. I presume they then make the refund direct to the client and you have to bill them. So I will need to write (as his agent) with a copy of my invoice. Four questions here:
1) What is the procedure? Is a simple letter to the originating tax office sufficient?
2) What is the going rate? I was thinking £100 plus VAT (as the input tax is technically irrecoverable).
3) Can my client make an additional claim for "distress" caused by their error? I believe that's the magic word you have to use. If so, how much is realistic in a case like this?
4) How could this have happened? Why didn't their confirmation of submission "close" the PAYE account?
Shame I can't claim anything for my own distress after getting his e-mail. I see they don't send these letters to agents but only advise taxpayers to show them the notice. If they had sent it to me first I could have told them it was wrong. My client wants to keep 50% of the £100 fee as his share, but perhaps I can get 50% of his claim for distress if it is successful!
- Who can wind up a Promissory Trust? 63 2
- Builder Gifted Deposit and capital gains 424 14
- *Urgent pls advise * filing dormant accounts to Companies House 354 16
- Limited Company - Personal Bank Account 402 13
- Website development costs - tax and accounting treatment 189 2
- MAAT signing off ACCA PER? 276 2
- Amazon - digital book sales 183 1
- tax insider 298 4
- Auto-Enrolment 201 3
- Annual subs 167 2
- Statement of Earnings, no P45 151 2
- Expenses paid by director (the owner) 185 2
- Mileage and Self Assessment 160 1
- ICAEW professional subscription and tax implications 225 4
- CGT Relief on Share Sale in LTD company 334 5
- Problems filing paper copies of accounts / computations with HMRC 498 9
- Payroll Manager not reoprting properly 320 7
- Directors remuneration declared after year end PAYE/NIC 609 25
- Advice please on best way forward 446 6
- I received penalty as I didn't submit full payment submission (fps), how to correct it? 355 2
- Skandia using wrong address 1,410
- Nil Rate Band Trust - index linked debt by way of charge over property 721
- Any views 660
- HMRC Employers Diary 493
- International interest certificate 410
- Stamp Duty on share for share exchange 367
- Sale of business 314
- NOVA 224
- IR35 & Managed Service Companies 220
- Advertising services? 218