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Revenue apologises for incorrect penalty notices

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25th Feb 2005
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The Inland Revenue has apologised for the "very unusual" problems reported by TaxZone contributors whose clients received incorrect penalty notices, and revealed that 2.6m tax returns were filed in the last two weeks of January.

Roger Harding reported in Any Answers on Friday morning that he had received three telephone calls from clients who had received penalty notices for late submission of 2003/04 tax returns.

"All returns were submitted via FBI and we have the email confirmations of receipt," he said.

Robert Newman posted a comment to say that of 461 returns submitted, late filing penalty notices had been received for 113. 'Andrew' said he had received ten "duff" penalty notices.

The Revenue promptly issued an apology when contacted by TaxZone. A spokesman said: "We apologise if any of our customers have received a penalty notice in error. The problems your contributors have had are very unusual and we are sorry to hear of them."

He added: "There is no question of anyone having to pay a penalty if their return was filed on time. When a penalty notice has been issued in error we will apologise and put matters right straight away. The penalty notice itself tells people what to do if they do not know why they have received a penalty notice."

Newman told TaxZone later that nine of the 113 notices he had received were correct, but 104 were not. "[The returns] were all delivered in time and we have receipts for all of them," he said.

January surge
Late on Friday the Revenue disclosed that it received 2.6m returns in the last two weeks of January.

A spokesman said: "Dealing with them is a vast operation. Of course we make every effort to minimise mistakes but given the volume of returns there will, unfortunately, be cases - however rare - where errors occur.

"We have carefully reviewed the clerical processes used when receiving an SA return, especially around the very busy peak filing times in September and January, to ensure any errors are kept to an absolute minimum."

The Revenue told TaxZone earlier that of the 1,599,364 returns filed electronically by 31 January, 1,234,136 returns were submitted via SA Online and 365,228 via the Electronic Lodgement Service.

Andrew Goodall
[email protected]

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Replies (18)

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By RogerCB
02nd Mar 2005 11:53

Maybe they are not so bad
We received 8 late filing penalty notices, 7 for the clients who did not and still have not provided us with any information, and one for a client who has 2 UTR's which we pointed out in 2003. We filed 324, mostly by internet and had a few problems with missing 64-8's and finding out that the IR had set us up with 3 agents references. So overall not too bad; or are the incorrect filing penalty notices still to come I wonder?

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By gcrowcroft
28th Feb 2005 12:10

No telephone help!
I received two incorrect late penalty notices for partners in a partnership this morning. I rang the Revenue immediately to query them and was told that the Revenue were no longer answering queries on late penalty notices over the phone - they had to be queried in writing! This is contrary to what it states one should do on the form itself and it automatically increases the work load of accountants ....... and delays the resolution of the problem for the client.

Has anyone else incurred this response?

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By RimBoy
28th Feb 2005 12:32

File Electronically!

I filed all of my Returns using ELS, without any problems, if more practitioners used the service, I guess the Revenue would re-consider there decision to abandon it.

Have any practitioners out there received penalty notices for ELS Returns?

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By kmacd
28th Feb 2005 14:18

Frustration!!
It is with some frustration that I read of other practitioners who have managed to obtain stamped receipts from the Inland Revenue. We regularly file inperson at Scotland South Area and have been told, as have other Edinburgh firms (and no matter how big the fish!) that they will not stamp any type of document to confirm a return has been received - reason - too much work to check a receipt against the return. Whilst I can almost be sympathetic when you turn up with 100 tax returns looking for a date stamp, it is cerntainly not fair on my clients if other districts are willing to do this.

Incidentally, 6 incorrect penalty notices received so far (including one issued for nil as they realised it was wrong - although original of £100 never received!!)

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By AnonymousUser
28th Feb 2005 14:34

Can anyone beat this?
I filed a 2003 partnership return in December 2003 (ie more than a month before the deadline). One lunchtime in February 2004, I came back from a meeting to find agent copies of late filing penalties issued to the partners, telephone messages from some partners and e mails from others.

It wouldn't have been quite so bad if there weren't nearly 70 partners involved! Somehow, several retired partners had all been sent notices too. Between the originals and the agent's copies, there must have been a small forest felled somewhere.

The Revenue was originally adamant that they hadn't received the partnership return, but later phoned back to say they'd tracked it down. They were extremely apologetic and embarrassed that it had happened with such a large partnership. What can you do but laugh???? I did suggest that as compensation the Inland Revenue ought to plant a few trees and dedicate them to the partnership involved.

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By keithyates
28th Feb 2005 11:51

It's not just the admin sorting it out . . . .
it's the aggrieved client on the end of the phone who thinks you haven't done your job because (s)he's just received a penalty notice. I do make a point of hand delivering and getting a receipt so that I can easily prove I've delivered them. Last year I had about 5 incorrect penalty notices, the same this year so far.

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By rkpgreen
28th Feb 2005 12:02

But the Revenue have been helpful...
I received a call from Scotland West last Wednesday 23rd, advising me that 6 clients would receive fine notices unnecessarily, and that they were issuing Cancellation notices that day also.

The lady apologised for the Revenue's error, saying that at least it would give me time to contact the client first, before receipt of the penalties. How's that for damage limitation, sorry, Customer Service?

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By User deleted
01st Mar 2005 11:24

Incorrect penalty notices
We, too, have had a number of incorrect penalty notices. All our tax returns are submitted by hand.

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By jmsynge
28th Feb 2005 13:11

Late return penalties
If the IR have given the reason for this problem as being 2.6m returns received in the last two weeks of January, then why have they also sent a late return notice for one I personally lodged early in December, at an IR office, for which I have a receipt? Answer they "lose" returns but are never at fault when it comes to questioning their internal paper handling. The moral, if not filing electronically, ALWAYS get a stamped receipt for the return lodged, which at least contains the UTR, tax year, and date. Do not rely on recorded delivery either, as it does not prove the contents of an envelope, merely that it was delivered.

(By the way, Graham, I wonder if ELS is more robust than FBI? Perhaps the sheer volume has made the IR systems fall over, and would do so with ELS which has not really been volume-tested.

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By david reed
28th Feb 2005 14:02

Late Return penalty notices
The whole thing is quite exasperating not helped by Inland Revenue officers who phone up the clients saying the Returns have not been received.

This has happened in at least one instance when the form was filed in July 2004, liability agreed and repayment issued.

The Tax Officer was quite unable to understand that in the absence of a claim to reduce payments on account it was difficult to see how a 2003/4 repayment could otherwise have arisen.

He was sent away with a flea (I almost said fee) in his ear but of course the seeds of doubt have been sewn and the client is unhappy.

In the words of Frasier Crane "what is a boy to do"

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By User deleted
28th Feb 2005 12:50

Partnerships?
What is it with the penalty notices for defunct partnerships? One of our clients has just received a penalty notice for the partnership they ceased with, back in July 2002! (And yes it was correctly completed and sent in on time!) This hasn't been a one-off occurrence though and for the Revenue to come out and say these are 'unusual' takes the biscuit. Luckily the majority of clients are understanding, but this sort of thing does undermine our professional standing somewhat!

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By AnonymousUser
01st Mar 2005 08:31

Easy answer - Bar code
There is a very easy answer to all of this, bar code each return when issued and when returned you just scan it in and hi presto no penalty notice.

Also could be linked to a receipt system when handed in personally, scan the 100+ returns taken in by the firm and a receipt is printed automatically when the 100+ are scanned through.

Just like shopping at the supermarket.

Then again I suppose it is too simple for our present goverment!!!

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By John Savage
28th Feb 2005 11:58

Speaking of which.....
Have just received two copy penalty notices totalling £200 this morning, to each of two partners for their partnership return.

Have replied to the Revenue, also copied to them the receipt I obtained from the Revenue on 21st January when it was hand delivered to our local tax office, and also sent the Revenue an invoice for my time!!

Client has also been sent a copy of my letter to the Revenue, just to avoid them being aggrieved, which they would normally have every right to be.

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By rkpgreen
28th Feb 2005 17:23

Inconsistent treatment
Following up Kenny's comments below, the Glasgow Revenue Enquiry Centre in Cochrane St was only too happy to stamp a list providing we had all the returns in the listed order for them to tick off. They even put an extra table with staff member in the foyer on Monday 31st when the queue started to form. That said, we lodged everything possible by Internet, and only lodged partnership, trusts, and "repairs" manually.

Surely the IR should have a consistent approach? Maybe Kenny should make this point at a future Working Together meeting.

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By User deleted
25th Feb 2005 16:49

Paper Returns
I have had 13 penalty notices this morning.

8 were correct. The other 5 incorrect.

One of the Returns was posted on 10 January and the Revenue (apparantly) received it on 9 February!

One of the Returns was hand delivered on 31 January (by myself). It was included with approx 40 others - I wait to see whether I am going to receive penalty notices for these too!

In a phone call to the Revenue they admitted that some partnership Tax Returns sent with an SA Return had been logged with the wrong date.

I have no receipts for any of these as they were all either posted or hand delivered. What is the point in getting these in on time if the Revenue are unable to accurately record the receipt of them?

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By John Savage
25th Feb 2005 19:04

Obtain receipt
The lessons from this is that all we accountants must obtain a written receipt from the Revenue when we do hand deliver our clients' returns. I have been obtaining these for the past two years after hearing of the Revenue losing some returns. That way we have proof of timely filing.

I sincerely hope and trust that those accountants whose clients have received erroneous penalty notices are charging the Revenue for their time spent in dealing with it. Once the Revenue accept the error, they should pay the charge by way of compensation though the client!! It is not up to our clients to suffer our time costs in dealing with these errors, and it is not up to us to lose out own time in dealing with Revenue errors - of any sort.

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By Abacjm
26th Feb 2005 23:40

What kind of Office information System do they have?
I also got some penalty notices today. The most annoying was one for a client for whom I already had received a formal notice from the Revenue back in August last year that this client was no longer required to submit a Tax Return!

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By Helen Crowley
01st Mar 2005 09:28

Bar code?
Good idea but most agents use substitute return forms generated from their tax software rather than the original return issued by the Inland Revenue.
Also someone asked if any penalty notices had been issued in respect of ELS returns - we lodged a significant number by ELS (thousands) and I'm not aware of any incorrect notices being sent to our clients for Returns lodged by ELS

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