Save content
Have you found this content useful? Use the button above to save it to your profile.
A village postman delivering the mail by bicycle AccountingWEB - Clients’ VAT penalty notices were sent to agents’ homes
istock_Mail-Bicycle_Leadinglights

HMRC sent clients’ VAT penalty notices to agents’ homes

by

HMRC has paused sending taxpayer VAT penalty letters to agents after a small number were sent to the home addresses of agents.

2nd Jun 2023
Save content
Have you found this content useful? Use the button above to save it to your profile.

The tax department has blamed a system error after multiple commenters on Any Answers reported receiving their clients’ VAT penalty letters at their home addresses. 

An HMRC spokesperson told AccountingWEB: “A system error has seen a small number of VAT penalty letters sent to an agent’s home address instead of their business address. We are looking to fix this urgently and apologise for any inconvenience caused.”

HMRC has confirmed that it has paused issuing further customer penalty letters being sent to agents until the issue is fixed. The tax department said it hopes to have the situation resolved very soon. 

Concern raised on Any Answers

Concern was raised on AccountingWEB’s Any Answers forum after a member received a client’s penalty notice from HMRC which was headed: “We’ve issued you a VAT penalty point” and realised it was connected to a client’s VAT number. 

AccountingWEB member John R wrote: “I have a separate partnership with my wife based at home so initially thought it had been incorrectly issued as our VAT return was definitely submitted on time.” 

He said the letter didn’t include a client’s name, but instead the letter directed: “If you’re an authorised agent use the above VAT registration number to check if this notice applies to you or one of your clients. Go to gov.uk and search for VAT check.” From here he was able to establish that it was related to a client. 

John R was full of questions as to why this letter was sent to his home address rather than the office address set up in his firm’s agent services account. The letter also did not state whether the client had been sent the notice or whether he needed to notify the client. 

Not the only one

John R was not the only agent to receive a client’s VAT penalty letter at their home address. Regular contributor, Ireallyshouldknowthisbut, also received a letter, and posited that “HMRC must have sent out a slew of them.”

Other readers came forward and shared their experiences. “I received one earlier this week. Assumed it was for my own VAT and was on the verge of firing off an indignant letter when I noticed the quarter wasn’t right and that it wasn’t my VAT number,” said Jane S-D. 

With no information on the letter, Jane S-D had to “do a trawl of VAT-registered clients” to figure out who exactly the notice belonged to.

SXGuy, another recipient of the letter at their home address, remarked how they hated the wording of the letter because “it makes it appear as though the agent has a strike when in reality it’s whoever the VAT number belongs to”.

GDPR implications?

Yet, while commenters were understandably irritated by the supposed blunder, others questioned the privacy implications of HMRC using a practitioner’s home address in order to reach their clients on matters as important as VAT penalties.

Stacey03 called the letters a “GDPR breach” and added: “I have no idea how I am going to ensure my home address is removed from all those clients’ records and I also have no idea where to go from here.

“I spoke to [HMRC] and they said they have no idea how it has happened, but they confirmed that when the client logs into their VAT online account, they can see my home address. It makes me very nervous and cross,” Stacey03 continued.

Any Answers regular rmillaree echoed Stacey03’s sentiments, arguing that the VAT office needs to explain to practitioners why and how this is happening.

“I would be pretty raging mad if HMRC is harassing individuals at home who are employees of an agent,” rmillaree wrote.

This issue of VAT penalty notices being sent to agents’ home addresses has only added to the confusion after it emerged that HMRC deliberately removed the taxpayer’s identification details from these notices to align with GDPR law. 

As AccountingWEB reported in April, the paper notice is sent in a window envelope and due to the design of the notice, HMRC was concerned that the taxpayer names and addresses on the agent copies would be visible through the envelope window.

Tags:

Replies (8)

Please login or register to join the discussion.

avatar
By Hugo Fair
02nd Jun 2023 18:32

"HMRC deliberately removed the taxpayer’s identification details from these notices to align with GDPR law ... the paper notice is sent in a window envelope and due to the design of the notice, HMRC was concerned that the taxpayer names and addresses on the agent copies would be visible through the envelope window."

Why perpetuate the balderdash spouted by HMRC?
The decision *may* have been taken on the basis of HMRC's incorrect interpretation of GDPR, but that *doesn't* make it 'align with GDPR' (which has no such requirement).

After asking children from the local primary school, some potential solutions are:
* Print the 'confidential' data on part of the letter that is distant from the window;
* Print it overleaf (or even on a separate page);
* Print it on pressure-sealed stationery (like those old 'sealed payslips');
* Replace window envelopes with ordinary ones (printing address direct or via labels).

Of course, given the number of postal items that disappear into an eternal void (or arguably more worryingly are brought round by the incorrect recipient to whom postal service made the delivery), concern for security is probably being focussed on the least important aspect!

Thanks (6)
Replying to Hugo Fair:
avatar
By lukeoliver
05th Jun 2023 13:55

Absolutely spot on

There is no-one at HMRC with a bit of sense to see that this is totally absurd.

As usual nothing will happen, HMRC are totally above any law or recourse whatsoever.

Thanks (0)
avatar
By DKB-Sheffield
03rd Jun 2023 22:16

One of HMRC's craziest excuses of all time!

Having received said letter (and having had the same concerns as others that my VAT return was somehow not 'picked up') I note the VAT No is at the far right-hand side of the letter. One would assume the client name should nestle just below this? Even the best efforts at 'peeking' beyond the window would be futile!

I assume whoever designed this [allegedly] 'non-compliant' letter from HMRC got paid for this? And whoever checked that letter considered the guidelines they must have been given? GDPR issues, or not, how is it possible to 'design' a letter incorrectly? And why should it need 'designing' in the first place?

At least we can rest assured - there's no likelihood of any similar issues once we have the most digitally advanced tax system in the world! We certainly don't have the most advanced traditional one!

Incidentally, I received the letter at my home address too. However, I'm not sure if that was right, or wrong, as it is also my office address. I'll give HMRC the benefit of the doubt for once!

Thanks (2)
By Duggimon
05th Jun 2023 09:55

How have HMRC got the agents' home addresses? I've never given them mine.

Thanks (1)
Replying to Duggimon:
avatar
By John R
05th Jun 2023 10:14

I seem to recall that somewhere within the ASA setup procedure, I was asked for my personal UTR and as this is linked to my home address, I assume that this is where the HMRC system picked up the address for the purposes of their database.

Thanks (3)
avatar
By RichBatoul
05th Jun 2023 11:50

Two of these letters were delivered to my home address on the day my wife took me to hospital for a biopsy procedure for a potential cancer diagnosis.

Not being an accountant, she freaked out thinking these were penalties that had an effect on her.

HMRC certainly know how to stress ordinary working people who pay their taxes whilst allowing the real tax fraudsters off the hook.

Thanks (2)
avatar
By Mallock
07th Jun 2023 10:21

As a sole trader (with 10 staff), I got really wound up when I needed to enter my personal details to get an Agent Services Account and every time our authorisation expires (after 18mths?) I have to re-input my personal details into the PC of each of my staff.

I complained to HMRC 3 or 4 years ago and I have complained more recently when the VAT Registrations confirmations for clients were sent to my house.

This is all down to the fact that HMRC appear to believe that a sole trader is just one person working out of the back bedroom of their house when in reality there are many who work from offices and have staff. Whoever was given the specification for writing the software was poorly instructed.

For MTD and Agent's Accounts etc, sole trader agents should be treated as businesses and not individuals.

Thanks (0)
Replying to Mallock:
Morph
By kevinringer
12th Jun 2023 10:34

Same with a partnership: I have to input my personal details to obtain HMRC re-authorisation.

Thanks (0)