Newth Talks Tax - Self assessment penalties

We have suffered from incorrect penalties in the past. We simply calculated an approximate cost to the firm of dealing with them and wrote to the Area Controller to request compensation. We confirmed that we had only charged them for the penalties issued in error and it was soon agreed and paid.

Whilst I can appreciate the frustration in having to deal with incorrect penalty notices, I think we need to be careful before demanding the right to sue HMRC for the time costs spent in rectifying matters.

Surely, if this were to be allowed, then in the interests of fairness, HMRC should also be able to sue accountants and/or clients for their costs of sorting out our errors. Can we all honestly say that everything that we have ever submitted to HMRC is perfect and that they have never had to correct anything?

I also think it is a bit rich of the barrister to complain that HMRC cannot be sued for, if my memory serves me correctly, until very recently a barrister could not be sued for giving an incorrect opinion.

What we're all against here is the indiscriminate issue of computer generated penalty notices. Whether it be PAYE, SA or other penalties, it is obvious that an inordinate number of them are simply bringing the Revenue into disrepute. As if they needed bad publicity.

If HMR&C are to be endowed with some of these draconian powers, (I'm quaking in my boots at the CIS penalty regime) then they need to be considered intelligently.

EG. if the Revenue allow 3 or 9 months to go by without so much as a reminder issued to the miscreant, then the Officer should only authorise one months worth; £100.