Member Since: 15th May 2006
20th Jul 2020
Please will readers sign the online petition to the government asking for the temporary relaxation of Stamp Duty to be backdated to the start of the lockdown in March as there are thousands of people who were forced to move for personal circumstances had their completions delayed until after the lockdown and they completed just before the 8 July Budget.
19th Feb 2020
You are lucky to get a response from HMRC's complaints team in just 2 1/2 months, but waiting 11 months for a response to your original statutory objection is as outrageous as the circumstances of my case as outlined above. You say that HMRC disagree with s9ZB TMA 1970, but obviously they cannot as that is the law. It is great to hear that you have forced HMRC to comply with the law as without people like you and I to enforce it, HMRC will continue to get away with it. I hope you will now issue a separate bill to your client for all the unnecessary work and when you client has paid it, send the receipted invoice to HMRC with a demand that they compensate your client accordingly.
14th Feb 2020
Unfortunately it is not possible to lodge an electronic amendment to a case where there is an HMRC exception as HMRC never fix their exception errors in the year that they arise. All HMRC aim to do is to fix the error for the following tax year and they don't always even manage to do that. For at least 10 of my cases a year, there is a warning on the system to say that that the client's highly unusual pattern of data falls into an HMRC exception and the system tells me that I have to lodge a paper return to avoid rejection. It also tells me to make a manual calculation to over-ride HMRC's calculation. With the warning on the system, I naturally follow the advice, prepare a manual calculation and lodge the return in paper format with a "reasonable excuse" claim when lodged after 31 Oct. In all these circumstances HMRC have never fixed the error for the tax year and so no electronic amendment is possible. In the case I have been talking about, there was no warning on the system for at the time of submission, HMRC had not published their exception error and the return was lodged electronically and the client paid the tax per the system's SA302. I really don't see anything wrong with that. When somebody has a £170,000 tax liability arising from over 20 sources of income, a £1,200 difference is impossible to see without making a long laborious calculation. I have in the past downloaded various online calculators and spreadsheets, but they all come up identical to HMRC's SA302 so I remain in search of a calculator that will give a 100% accurate answer. As HMRC with teams of programmers working full time for 3 years cannot get their calculations right, I cannot be expected to produce something better. According to a genius computer programmer that I know, he says that many people have tried to sue computer programmers for the hassle caused by bugs in their system, but nobody has ever been successful as courts understand that it is impossible to have a perfect program. A basic tax spreadsheet will work 999 times out of 1,000, but there will always be an unusual pattern of data once in a while that causes it to fail. This is a bug that when fixed will then cause another bug to materialise.
13th Feb 2020
The fact that you sent in a return over a year ago means that HMRC are out of date for normal assessing. They may have grounds for a discovery assessment, but a PA302 is not a discovery assessment.
You need to lodge a complaint with HMRC and then you can claim compensation for your client to cover your fees
13th Feb 2020
I don't check SA302's unless HMRC respond with a different figure or unless HMRC electronically reject the return. You say I should know what the client's tax liability is, but you don't say how I can calculate this when there is no spreadsheet template in the country that deals with HMRC's Exception Errors. In the absence of this impossibility I will continue to rely upon the SA302 which the system creates. I am not going to spend a whole month or more trying to create a spreadsheet that works when one year later it would need redesigning again. Simply changing allowances and tax rates does not work as that is what HMRC do and they create more Exception Errors in the process. I really don't like your suggestion of "juggling figures to get the return through." My clients returns are ultra squeaky clean and I am not going to falsify their income or expenditure just to show a higher tax liability than that showing on the SA302. As you should know, it is not possible to show a higher tax liability that the return software suggests without falsely showing a higher income or lower outgoing. My clients returns always have been and always will be ultra squeaky clean and I will not juggle with the contents in the way that you suggest. I have asked you to publish your spreadsheet so that we can all check it out. It obviously is the only spreadsheet in the country that does work and the whole profession and indeed HMRC would welcome a copy of it. As you know HMRC have been working on this continuously for 3 years and still cannot get it right.
13th Feb 2020
The problem is that there is no spreadsheet template in existence that correctly overcomes every single HMRC exception error so how can we check HMRC's SA302's against something that does not exist! As mentioned, with the complexity of the client that I have, if an experienced computer programmer would take 2 weeks to design a template then it would take an accountant even longer. I have been talking about a client that has every conceivable source of income and every conceivable outgoing. I can only presume you are talking about straightforward cases that have never been on HMRC's Exception lists. The fact that HMRC have never electronically rejected one of your returns proves that they are straightforward cases that have never been on HMRC's Exception lists. Class 2 NIC problems really don't fall into the complex exception category. I look forward to you publishing your spreadsheet template so that I can test it against all of HMRC's Exception errors on my clients with highly complex tax positions.
13th Feb 2020
Physically impossible. My client's return includes every single available supplementary page (except clergyman) and the tax liability from over 20 differing sources of income plus complex outgoings is well over £100,000. If you have a spreadsheet that can cater for that which is not based upon HMRC's calculation then I am sure that every accountant would be wanting a copy of the template especially as on the lower income cases we now have to look into situations of allocating personal allowances to a particular source of income to reduce the liability compared to just setting allowances against earned income.
Please publish your spreadsheet template so we can all see if it truly overcomes every single one of the Exceptions that HMRC have now published. I have the good fortune to know a highly experienced computer programmer and have previously been told that it would take a minimum of 2 weeks full time work to create a spreadsheet template to overcome every one of HMRC's Exception errors. If it only takes 5 minutes to do, how come after 3 years HMRC still haven't managed to correct their errors. Does your spreadsheet really cater for situations where dividend income needs to be taxed at 40% or 45% when the standard rates are 7.5%, 32.5% and 38.1%? I suspect not.
Are you not missing the whole point of the article which is about HMRC trying to collect tax (using debt collectors in my clients case) when they are outside of the statutory time limits to make an assessment. At the end of the day my client should receive a refund of the £1,200 un-assessed tax compared to one of your clients where you say you would have identified the highly complex error in 5 minutes and told the client that he would have to pay £1,200 more than HMRC initially wanted and then had to go to the trouble of lodging a paper return. Having talked to hundreds of accountants over the last 40 years I don't know of one who would want their client to pay more tax than that assessed by HMRC on their SA302 calculation. They would advise the client that more may be payable if HMRC make an assessment in a timely way.
13th Feb 2020
Unfortunately, in common with most tax agents, we do not have the time to prepare our own manual tax calculation (outside the program) just to check what the computer program says. We therefore print out the SA302 and send it to the client with advice of what to pay and when. If you or I disagree with the SA302 then as this cannot be changed within the program we are then forced to file a paper return (at extra unnecessary cost) as HMRC's receiving computer would reject an electronic submission showing a liability at variance to their calculation. My client paid exactly what the SA302 said was due and I do not believe you would have seen anything wrong with the SA302 without spending a few hours to recreate it on a spreadsheet. What is the point in using expensive tax return production software to make the calculation if every time we then have to spend hours checking it by means of a spreadsheet. My clients would not want to pay for this duplicated work which in the majority of cases would be unnecessary. It is after all, in only a handful of cases where the SA302's are wrong and until HMRC publishes its exception list (which they had not done at the time the return was lodged) we have no means of identifying these erroneous SA302 cases. I do not think it unreasonable for tax agents to use the SA302 as provided without spending hours independently checking it first. In my book, when the SA302 is wrong it is HMRC's fault as they are the ones that wrote the calculation logic and imposed it upon all tax software producers to embed in their programs.
12th Feb 2020
The problem is that no matter what software is used to prepare the return, the programmers are forced to use HMRC's calculation even where HMRC's calculation is known to be incorrect. If the return is electronically submitted with differing figures to HMRC's calculation then HMRC's computer will reject the return. This is why all tax software programmers are forced to use HMRC's calculation and cannot use anything different. At the time I submitted my client's return the liability showing was £1,200 less than what a manual calculation will NOW show it to be. As there were no warnings on the system, we had no way of knowing that HMRC's calculations (embedded in the software) were showing a liability of £1,200 less than it should be. Client therefore paid the tax as calculated by the software and this then showed up on HMRC's statement of account. As HMRC did not amend the return within 9 months of the submission, their actions in calling in the debt collectors to collect the £1,200 at a later date was unlawful.
12th Feb 2020
It is reassuring that one of my clients is not alone in the fight to force HMRC to comply with the law. We electronically lodged our client's 2017/2018 return on 15 Oct 2018 and at the time there were no warnings on the software that this might be an "excluded case"Happily the return was accepted by HMRC. Eventually, we found out it was an excluded case. Neither our client or ourselves received anything more from HMRC until their Debt Management Departments's rude and threatening letter dated 29 March 2019 telling the taxpayer to pay approx £1,200 immediately. Our client duly paid. Please note that to this day, HMRC have never issued a corrective notice within the 9 month window and naturally the 12 month enquiry window has passed too. We made a formal complaint in writing to HMRC on 23 April 2019 and despite reminders by telephone and letter there has been no reply after over 9 months. By telephone I have though asked for a copy of the correction notice that neither my client or ourselves received, but they tell me that no such notice is on their computer. Upon threatening referral to the Ombudsman, HMRC say that they will reply soon, but after 9 months waiting for a reply I don't know what they mean by "soon." Thanks for the article Rebecca