My client is on PAYE but has a small amount of royalty income. For several years this was dealt with by my client ringing hmrc once a year, telling them what the royalty figure was for the year and they issued a P800. Then in 2011/12 they issued a tax return and he came to me. All filed no problems.
Then this year, he told me he had been paying a professional subscription for several years which had not previously been claimed, so I said we could file an overpayment relief claim for 2009/10 - 2011/12 and claim relief for these years, which we did. The resulting overpayment for each year is about £65.
2011/12 has been processed with no problems, but HMRC have now issued tax returns for 2009/10 and 2010/11 and say "we are no longer able to make a review of earlier years via the PAYE system as a tax return was filed for 2011/12". The "apologise for the inconvenience"
So my client now faces the cost of two further tax returns to get £130 back. And now the returns have been issued, unless we can get them cancelled they have to be filed.
Surely this can't be true?? My feeling is someone at HMRC has accidentally deleted something and now my client has to sort out their error. He has already provided all of the information once.
Someone at HMRC is going to "ring me back" but this is a nonsense. They are very free and easy with other people's time and money.
Any suggestions anyone, other than fill in the wretched forms again?
Replies (10)
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Yes - a bit of a pain but..........
..did you not warn your client that this might happen before you started?
Surely you must have realised that HMRC might well have asked for tax returns and you are fortunate to have got 2012 dealt with so easily.
Hardly worth putting in the two earlier returns is it? Mind you, if they are as simple as you make out, why not do 'em for free and incur the goodwill of your client?
Lucky in past?
I can't help thinking that the royalty income in prior years strictly required a tax return, and they have been lucky to get away without one so far. If you now want to claim an expense as well, I can see why HMRC would want to get the submission on a more formal footing.
As nigelburge says, if it's really as simple as you say, why not just do them included in your bill. Presumably you are making some charge for dealing with this claim anyway. You already have the client details on your system, so it is not like you are going to incur any additional set-up costs to create these returns.
HMRC probably aren't being ridiculous and unreasonable
I just think HMRC are being ridiculous and unreasonable for such a small amount of money, and before putting my client into SA a quick phone call would not have gone amiss.
I agree with you that this is such a trifle that HMRC shouldn't have to deal with it through a tax return, however given there is no "de minimis" limit on taxable income in this regard and particularly the fact that HMRC have issued the returns you appear to be attempting to make water run uphill. It seems better to just supply the completed returns and either you or the client takes the hit when dealing with HMRC in such matters.
HMRC exist to apply taxes laid down by statute by parliament, not to reduce the hassle caused to taxpayers and their agents.
@taxhound
I may be being just plain silly here, but it strikes me that you could have prepared the two tax returns requested in the time you have taken to post here on AW.
And although it pains me to say it - I somewhat agree with HMRC here. As Stepurhan says, you have been rather lucky in the past.
With all due respect
I may be being just plain silly here, but it strikes me that you could have prepared the two tax returns requested in the time you have taken to post here on AW.
I think thats a bit harsh. The OP is entitled to raise his concerns here and I am sure it is more the overall HMRC attitude that is the problem.
To be honest, I wouldn't have made a backdated claim for such a small amount, the hassle involved and cost of doing so just wouldn't be cost effective.
Now I would suggest you review HMRCs criteria for self-assessment. If he meets any of that (and I include the royalty income in that) you don't have a chance of convincing them that he shouldn't be preparing SA returns.
You're not wrong, but you're swimming against the tide...
No, it is not about my fee and what I may or may not charge, it is about the continued attitude of hmrc and their complete disregard for what is "reasonable" from their "customers". I am very surprised that everyone else here seems to think that is absolutely fine.
The days of HMRC reasonableness are long gone along with the local offices and district inspectors.
To be reasonable requires both a thorough understanding of tax law and the ability to be flexible. These were features of the UK tax system in days gone by, but this is no longer the case.
A lot of these problems arise because of the inherent inflexibility of workflow-based computer systems, whereby if an easy solution to a tax issue is "Issue a tax return" then that is what will happen.
Neither HMRC nor our professional politicians (who have rarely had any exposure to operating a private business), care about the consequences of these actions, regardless of the time, hassle and cost to the taxpayer or his accountant.
I accept that this situation is frustrating and causes the blood pressure to rise, but nothing that you or I will do is going to change that.
Better to accept that this is just an unpleasant feature of modern life in the UK and do the returns.