HMRC refuse to amend an (old) return

HMRC advised of error and additional tax payable by letter but refuse to amend return

Didn't find your answer?

Just wanting some advice regarding the action to take when HMRC have been advised in writing that a return (outside of the 12 month usual amendment deadline) was wrong and additional tax was payable. HMRC's response was that no amendment would be made.

https://www.gov.uk/self-assessment-tax-returns/corrections states that you should write HMRC a letter to report income that you did not include in your tax return.

Give HMRC's response, I'm unclear how to proceed and wondering whether the original letter advising of the undeclared income could trigger a discovery assessment. 

Thank you in advance. 

Replies (40)

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By richard thomas
19th Mar 2024 13:08

A DA is the only thing it could trigger, unless you make a disclosure under one of the various facilities for doing so and a contract settlement is agreed. At least you've made an unprompted disclosure, so penalties will be lower than if they'd contacted you.

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By Not Anonymous
19th Mar 2024 17:37

Not 100% sure what you are trying to get at here.

If the amendment window has passed then there won't be an amendment made to the return.

Have HMRC issued an assessment of some sort or raised a charge on the clients Self Assessment statement of account?

Or are you saying they won't amend the return and are not going to issue an assessment or raise a charge?

What exactly was their response?

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By johnjenkins
25th Mar 2024 11:20

Surely this would come under an "error or mistake" claim. It doesn't matter if you have more tax to pay or are claiming a refund.

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Replying to johnjenkins:
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By richard thomas
25th Mar 2024 12:10

Er, yes it does, if by "error or mistake claim" you mean a claim for overpayment relief. Even if you meant the error or mistake relief of that name in s 33 TMA before 2009 then it still mattered as relief was given by repayment.

Offering to pay more tax may give relief to your conscience, but not for tax purposes.

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Replying to richard thomas:
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By johnjenkins
25th Mar 2024 12:30

Er, Richard, an "error or mistake" claim can include an over or under payment of tax.

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Replying to johnjenkins:
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By richard thomas
25th Mar 2024 12:42

Really? Under what statutory provision? And what would they be claiming "relief" for?

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Replying to richard thomas:
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By johnjenkins
25th Mar 2024 13:54

Richard, you're being pedantic. You write to HMRC with an "error or mistake" (it may well be called "overpayment relief" now) claim telling them the nature of the "error or mistake". How else can you let HMRC know that you have made an "error or mistake" in your return.

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Replying to johnjenkins:
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By Justin Bryant
25th Mar 2024 14:04

Just coz there may be no prescribed form (see case below) and that may be the practical result of such a inappropriately worded communication, that is (to put it mildly) rather extreme justification for you being right and RT being wrong (and he's obviously not being pedantic here).

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Replying to Justin Bryant:
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By johnjenkins
25th Mar 2024 14:15

Justin. there isn't an "overpayment relief" claim, but there is an "error or mistake" ok not claim but notification. Is that better?

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Replying to johnjenkins:
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By Justin Bryant
25th Mar 2024 14:35

I think it's best you accept RT is neither wrong nor pedantic.

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Replying to Justin Bryant:
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By johnjenkins
25th Mar 2024 15:07

OK Justin, how would you notify HMRC of an underpayment on a return that you couldn't amend?

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Replying to Justin Bryant:
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By johnjenkins
25th Mar 2024 16:20

So you make a disclosure because you made a mistake or error in your tax return which is out of time to be amended?

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Replying to johnjenkins:
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By Justin Bryant
25th Mar 2024 16:25

Yes. Or you could simply write a letter to HMRC per the case below. You should not make an error/mistake claim as per RT's expert view, as that's meant for tax overpayments (although I expect it would nonetheless be treated as an underpayment disclosure in practice per my above comments).

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Replying to johnjenkins:
By Ruddles
25th Mar 2024 15:13

As one of the biggest pedants around here I suggest that you read TMA 1970 Sch 1AB before accusing others of being pedantic.

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Replying to Ruddles:
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By johnjenkins
25th Mar 2024 16:00

So you are one of the biggest pedants around here eh. I suggest that you read your posts before posting them.
By the way love your beer.

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Replying to johnjenkins:
By Ruddles
25th Mar 2024 16:30

The point is that for those of us that know what we are talking about "error or mistake" and "overpayment relief" have specific meanings in tax. Reserving use of the terminology for the appropriate circumstances is not being pedantic.

If I were writing to HMRC to advise of an omission in a client's tax return you can be pretty sure that the word's "error" and "mistake" would be noticeable by their absence.

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Replying to Ruddles:
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By johnjenkins
25th Mar 2024 16:40

Yer that seems to be a problem for those that think they know. Using words that don't mean what has actually happened. So if you put £55k income in your return instead of £88k you have made an omission not an error or mistake eh?
See kevinringer post down below.
I still love your beer.

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Replying to johnjenkins:
By Ruddles
25th Mar 2024 16:52

kevinringer simply says that he notified HMRC - he hasn't given any indication of the words used. My point, which continues to escape you, is that there are better words than others to use when communicating with HMRC.

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Replying to Ruddles:
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By johnjenkins
25th Mar 2024 17:05

No, your point doesn't escape me. I've been dealing with HMRC for nearly 60 years and I can assure you that they are not interested in words used apart from a few, pragmatic being one. What they are interested in is the essence of the letter.
You've given me the taste now, I shall have to have a County, maybe two.

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Replying to johnjenkins:
By Ruddles
25th Mar 2024 18:13

HMRC, pragmatic? You and I clearly live in parallel universes.

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Replying to Ruddles:
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By johnjenkins
26th Mar 2024 09:20

I didn't say HMRC were pragmatic. We may live in parallel universes but we are travelling in the same direction.

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By Justin Bryant
25th Mar 2024 11:49

Perhaps it was like this (if outside the usual 4-year DA window and there was no carelessness).
https://www.bailii.org/uk/cases/UKFTT/TC/2024/TC09110.pdf

Or will be if you simply keep your head down and wait long enough.

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By fawltybasil2575
25th Mar 2024 13:37

@ charlb (OP).

(i) For the avoidance of doubt, when you say that "HMRC's response was that no amendment would be made", was that response given by HMRC in WRITING or by PHONE ?

I shall assume that the answer to (i) is "in writing" - on that assumption:-

(ii) May I ask the FIGURE for the Income Tax underpaid as a result of the error.

If the response to (ii) is relatively low (and especially if it is under £200 - I can explain the significance of that figure) I surmise that HMRC have advised you that no action will be taken simply BECAUSE it is insignificant: if such be the case, then frankly (1) NO ACTION should be taken by you and (2) it is very unlikely that HMRC will take any action.

Any subsequent attempt by HMRC to pursue the matter further would be foolhardy action by HMRC, which should be "jumped on" (by referring them to their incorrect initial advice, compounded by their belatedly pursuing a matter of insignificance).

If the amount at issue is NOT "relatively low", then the appropriate further action would depend on (a) the amount and (b) its nature: if such be the case, please therefore advise of (a) and (b).

In any event, ANY attempt by HMRC to impose Penalties should be appealed.

Basil.

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By johnjenkins
25th Mar 2024 16:07

In answer to your question charlb, do exactly as they say. Write to HMRC stating that there is an error or mistake of undeclared income. Tell them the facts. What should happen is they will send an additional assessment for the year in question and ask for interest. I'm sure that will be the end of it.

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Replying to johnjenkins:
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By More unearned luck
25th Mar 2024 17:29

Um, Charlb said that he/she had already written to HMRC (the query arose because Charlb was nonplussed by HMRC's response). So why do you advise to write again?

The Charlb merely said that the return was wrong and additional tax arises. No reason was given for the understatement of tax. It might have been because information supplied by a third part was wrong. There may have been no error or mistake by Charlb and the client, in the absence of the facts, why suggest the use of the antiquated phrase?

We don't even know if it was a case of un(der)declared income; it might have been a capital gain that was omitted or excessive relief claimed.

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Replying to johnjenkins:
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By More unearned luck
25th Mar 2024 17:28

Um, Charlb said that he/she had already written to HMRC (the query arose because Charlb was nonplussed by HMRC's response). So why do you advise to write again?

The Charlb merely said that the return was wrong and additional tax arises. No reason was given for the understatement of tax. It might have been because information supplied by a third part was wrong. There may have been no error or mistake by Charlb and the client, in the absence of the facts, why suggest the use of the antiquated phrase?

We don't even know if it was a case of un(der)declared income; it might have been a capital gain that was omitted or excessive relief claimed.

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Replying to More unearned luck:
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By johnjenkins
26th Mar 2024 09:23

You're quite right it could be anything. Don't you think that if HMRC are informed, not only, of the error, but the nature of the error, it will stop further communication except the Assessment and interest calculation?

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Replying to johnjenkins:
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By Tax Dragon
26th Mar 2024 09:59

Who said there was an error? Additional tax may become due for an earlier year without there having been an error in a return.

But... fun as the pedantry was yesterday (btw, is Ruddles the biggest pedant or merely the most pedantic contributor?) - it spoils the fun to roll it over into today. Imho.

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Replying to Tax Dragon:
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By johnjenkins
26th Mar 2024 10:16

Hasn't roll over relief changed?

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Replying to johnjenkins:
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By More unearned luck
26th Mar 2024 12:35

At the risk of facing TD's ire for engaging in two-day pedantry, my point was that the OP hasn't told us the nature of the error*; we don't know what the OP said to HMRC. My guess is that the OP was more forthcoming to HMRC that he/she has been with us. The fact that HMRC didn't ask any questions in their letter suggests that full facts were supplied at the outset.

*oops - as TD says what error?

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Replying to More unearned luck:
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By Tax Dragon
26th Mar 2024 13:05

You said it first - or at least, before me (others may have been quicker still).

More unearned luck wrote:

There may have been no error or mistake

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Morph
By kevinringer
25th Mar 2024 16:27

I had a case 10 months ago. I notified HMRC in writing at the time. They have only got back to me last week. They've sent an assessment which agrees with my figures. They've charged interest. They've not charged a penalty.

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Replying to kevinringer:
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By johnjenkins
25th Mar 2024 16:33

Spot on.

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By christina makhoul
25th Mar 2024 18:18

suggest you write to hmrc using one of their advised letter headings so correctly allocated https://www.gov.uk/guidance/agents-self-assessment-and-paye-letter-headings
spell out the nature of the error and all the boxes on the original tax return submitted. hmrc will usually amend after an extra ordinary delay and tell your client to pay the tax now to stop the interest clock. Done this loads of times (new clients that DIY wrong usually) not had any penalties yet

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Replying to christina makhoul:
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By More unearned luck
25th Mar 2024 19:11

Why write again when the OP has already written and, perhaps, did not have the patience to allow for HMRC's now quite ordinary tardiness*. A DA may be in the pipeline.

*Long delays by HMRC are the norm; they can no longer be fairly described as extraordinary.

But you are dead right about paying now.

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Replying to christina makhoul:
Morph
By kevinringer
26th Mar 2024 08:46

Thanks Christina, I wasn't aware of that headings list. It's very useful to know.

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By johnjenkins
26th Mar 2024 13:27

Could the poster be Charlene Boycie?

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Replying to johnjenkins:
By Ruddles
26th Mar 2024 13:31

johnjenkins wrote:

Could the poster be Charlene Boycie?


?
I think I know who you mean, but ...
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Replying to Ruddles:
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By johnjenkins
26th Mar 2024 14:27

I'm sure Boycie would have had his Missus on the books. See that's what a few pints of your brew does to me.

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