Done enough?

Done enough?

Didn't find your answer?

Every now and then we encounter, unfortunately but perhaps inevitably, occasions when a client has under-declared a tax liability in a self assessment tax return that has been filed but is outside the repair window at the time that the error is identified.  Being true upright citizens our clients accept our recommendation that the correct liability be disclosed.

We have been in the habit of making the disclosure by sending by post a paper copy of a corrected tax return, with covering explanation.  We do not expect HMRC to be able to process the tax return onto the self assessment system, because their computer would reject it as out of time for a repair.  We do however expect them to make use of the information contained therein in order to raise a discovery assessment.

On more than one occasion in recent history, HMRC has responded by advising that the tax return is out of date for processing as a repair (big surprise, not), and that if we wished to reclaim an overpayment for that year it would need to be done by a prescribed procedure for making a "claim for overpayment relief".

Note the conditional format of the statement; "*IF* we wished to claim an overpayment ... blah blah".  The instructions are silent on what further action might be required of us if we do NOT wish to claim an overpayment (as in these cases).

While it is clear to me that they have disregarded the explanation in the covering letter, which makes it clear that there is an underpayment, and have not bothered to calculate the effect of the content of the tax return supplied, which would confirm that conclusion, the question remains: have we done enough?  Are we ethically and/or legally in the clear if we now just sit back and see whether HMRC raises a discovery assessment while they are still in date to do so?

I am tempted to continue to forward such notifications to HMRC in this format if this is going to be the anticipated outcome each time.

With kind regards

Clint Westwood

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Me!
By nigelburge
11th Sep 2012 14:35

I agree with you.

You have done your professional duty and informed HMRC in writing and know that they have received your letter.

However, I would write another very brief letter to HMRC stating that no repayt will be claimed and suggesting they re-read your letter. Send it by recorded delivery and do nothing more unless/until you hear from them. If you don't hear ever again, no one could say that you could have done more.

This has happened to me a couple of times and boy, was the client chuffed when the time limit expired and he had gained due to HMRC's utter incompetence!

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