We have encountered another problem with HMRC. Yesterday we received a late payment penalty notice for a client in respect of the 2010-11 tax year. To summarise our client was requested by HMRC to submit a Tax Return for the year ended 5 April 2011. Unfortunately they lost it!!! and they eventually requested a paper return which was sent in June 2012 by our client. They have waived all late filing penalties depsite trying to charge them in the first instance.
In June 2012 our client also submitted himself a 2012 Tax Return which shows a refund due for that year. He requested that this refund be set off against the 2011 tax outstanding and he paid the difference once he received the final computations for 2010-11 from HMRC in July 2012.
the 2012 TaxREturn was processed on 3 July 2012 by HMRC and the refund (I have checked on line) was duly allocated to the 2010-11 liability on that date.
So you can imagine my astonishment when we received a late payment penalty notice calculated at 5% of that exact amount for the period from 1 March to 31 January 2013!!!! I have checked the account (Payments/credits received) on line and found that they have credited the refund re 2011-12 to 2010-11 but the date of the credit is 31 January 2013!!!
So I picked up the phone spoke to a very nice lady who was not help at all, she did not think there was a problem... So I asked her politely to put me through to her supervisor. And hold and behold he agreed that there was a problem and he admitted that our case was not the first..
Solution to the problem: we have to appeal against both the late payment penalty notice and the interest calculations as there are also calculated using final payment date of liability for 2010-11 as 31 Janaury 2013..
I suggested that a report to their software department might be in order. He said he had reported the problem already but would send another report.
Bless him he was most apologetic. I said I did not blame him personally as it was not his fault.
So more time wasted... Maybe HMRC shoudl ask a refund from the IT company which appears to make a mess of writing the correct programme and failed to notice errors on testing.
HMRC is really in a big mess..
So watch out folks your clients might be affected by this.