VAT and corporation tax payments worth tens of millions of pounds have bounced after HMRC changed its bank details without informing a number of companies.
The Telegraph reports today that a significant number of tax payments, sometimes running into millions of pounds, have been rejected, leaving firms with late payment penalties.
The changes to HMRC’s bank details took place in February this year when the Revenue moved its account to Barclays, and were flagged in an employer bulletin released last year.
While the majority of taxpayers paying their bills electronically remained unaffected, those making payments using international bank account numbers (IBAN) needed to use a new number when making payments through their bank.
The IBAN is a standardised way to allow overseas banks to handle the account number and bank identifier of a beneficiary in another country and is used in cross-border payment transactions, but it is also used in some instances by domestic companies.
Details of the HMRC bank account changes were also published on GOV.UK in February this year, which stated that customers likely to be affected by the changes will be contacted directly.
However, the message does not seem to have reached a number of businesses, who have only found out that their payments have not been accepted after receiving late payment notices, and are now left wondering how and what to pay.
Other companies who did receive HMRC correspondence about the account changes wrote them off as fraudulent.
Tina Riches, a partner at Smith and Williamson, told the Telegraph that the changes had been “poorly managed” with businesses not given “sufficient warning”.
Riches went on to state that the cases may be the “tip of the iceberg” as HMRC correspondence notices did not include the BAN number needed to make payments – something which could leave a “significant hole” in the government’s revenues.
Responding to the reports, an HMRC spokesperson told AccountingWEB: “HMRC’s move to a new bank will be invisible to most customers, who will not need to do anything different when sending payment to HMRC.
“Customers paying from overseas will need to update their payment details. Anyone experiencing difficulties in making payments should contact HMRC immediately.”
Have you or one of your clients been affected by this change in bank details? How could HMRC have better handled the move?