Save content
Have you found this content useful? Use the button above to save it to your profile.
Another blunder for submitted tax returns | accountingweb
iStock_nazarkru_blunder.

HMRC sent reminders for submitted returns in error

by

Something went wrong with the HMRC computer in December 2022 as it started spewing out reminder letters for tax returns that had been submitted months before.

5th Jan 2023
Save content
Have you found this content useful? Use the button above to save it to your profile.

Several AccountingWEB members have complained that they are being diverted from urgent 2021/22 tax returns by HMRC letters about late 2020/21 self assessment tax returns, which on investigation turned out to be incorrect as the returns have been submitted.

Diana Miller received a batch of incorrect late-filing notices on 20 December 2022. Eight other AccountingWEB members also received similar HMRC letters, relating to their clients’ 2020/21 tax returns, which were all issued by “Lee Graham” and carried the reference: ISBC/C&A/S073/LG. 

Some of the HMRC missives included an email address to reply to, which if used, generated a reply from a real person who explained the letters had been sent in error and should be ignored.           

Companies chased  

However, the problem was not confined to personal tax returns as ABC12 complained that he has received reminder letters for corporation tax returns (CT600s) which were submitted months ago. 

These CT600 letters may just be a matter of bad timing of an automatic reminder, but the unnecessary correspondence is extremely annoying for accountants who need to process each HMRC letter and double-check that the system has acknowledged the particular tax return as received. All this extra checking can’t be charged on to the client.   

Seeds panic

The personal tax return chasing letters were also sent to the taxpayers concerned, who are likely to believe what they are told by HMRC. So the assertion that the previous year’s tax return was not submitted may lead the client to accuse the accountant of not doing the job they were paid for. This harms the relationship between the accountant and their client.  

AccountingWEB member Tornado received one of these incorrect late-filing letters for a client and is angry that he has to spend time, as he put it, “trying to explain to him that an organisation that aspires to be one the best digital tax systems in the world has made a serious error in their records.” 

Penalty risk

HMRC has confirmed to The Institute of Chartered Accountants in England and Wales (ICAEW) and the Association of Tax Technicians (ATT) that taxpayers who have filed their tax returns on time will not receive any late-filing penalties. But this doesn’t remove the need to check that the relevant tax return was submitted on time and hasn’t disappeared into some digital hole.

Why did this happen?

HMRC’s explanation for the unnecessary and incorrect chasing letters is that there was a “mailing list error”. HMRC has assured the professional bodies that it has temporarily stopped sending these reminder letters while it investigates the issue further. 

Is HMRC broken?

These sorts of blunders prompt AccountingWEB members to recount other examples of bad HMRC behaviour as chronicled in an Any Answers thread started by Murphy1

So far we have examples of:    

  • Tax returns submitted but taking up to months or even years to be captured by HMRC
  • Repayments outstanding for more than four months 
  • Authorisation codes expiring before they arrive
  • VAT registrations taking over four months to process 
  • Clients incorrectly told PAYE payments were late, when they were paid on time
  • Taxpayer accused of using invalid NI number
  • Taxpayers chased for debts that have been paid by cheque months ago 
  • Letters from HMRC dated 24 April and 2 July 2022 arriving in November 2022.

If you have further examples of crazy incompetence by HMRC, please comment below.

Replies (45)

Please login or register to join the discussion.

Jennifer Adams
By Jennifer Adams
05th Jan 2023 18:56

I know we all moan about HMRC being useless (which of course they are) but just think how much of our hard earned taxpayer's money it costs to send out such letters - someone has to spend time compiling and typing the standard letter, load it onto the server, it needs printing out (paper costs) someone has to walk it down to HMRC's post room, put it through the post machine, and a postman /lady has to spend time delivering.

I've said it before and I'll say it again... if HMRC was more efficient there would be no 'tax gap' and therefore no need for MTD.

A thought though... are other countries equivalent as bad? Anyone know?

PS>> sorry.. forgot the most important.. someone will have had to check and recheck before letter is sent out (I suppose they do check?).. more time spent.

Thanks (4)
Replying to Jennifer Adams:
avatar
By Hugo Fair
05th Jan 2023 20:50

Seriously?

Granted it's a waste of money (stationery/printing/delivery) - but almost none of the activities in your storyline take place until the one not actually resourced by HMRC (".. and a postman /lady has to spend time delivering").

And that's the heart of the problem, right there.
HMRC no longer have any (human) skin in the game of communicating with their 'customers' ... it's all done by software (the decisions & the actions), so there's absolutely no sense of personal accountability.

Thanks (9)
Replying to Hugo Fair:
avatar
By JustAnotherUser
06th Jan 2023 08:23

"no sense of personal accountability" and never any sense of personal blame, pet peeve of mine that "HMRC" are blamed, who is this? which department, who is in charge? "HMRC said".

Thanks (2)
Replying to Hugo Fair:
avatar
By jvenegas16
06th Jan 2023 11:48

It is fair to say that software and computers do not work by themselves without human interaction of some sort.
The lack of personal accountability is also demonstrated on the fact that letters are not even signed, or have a name on it.

If the use of software and automation would remove accountability as it happens, imagine how comfortable fraudsters using technology would be, as they would have a defence, which is blaming the software.

And even so, who is monitoring the amount of letters going out, the amount of printing and envelopes used?

Thanks (0)
Replying to Jennifer Adams:
avatar
By ruth.julian
07th Jan 2023 18:41

HMRC has contracted out the printing and mailing of standard letters, so the fault is with the person telling the "computer" which taxpayer records to access eg for penalties, surcharge etc, make any calculations, and send to mail centre for printing and posting. It has also automated most of the printing and posting of "personal" letters, so any delay is in the availability of an HMRC employee to read and reply to a letter (I understand that this should be done within 30 days of receipt of taxpayer's letter).

Thanks (0)
avatar
By Philysis
05th Jan 2023 22:58

New vat registrations cancelled by hmrc with a letter to client advising they have cancelled the original registration without no explanation. AFTER 1hr 45 mins sitting on phone hold,
, the hmrc clowns advise the client a new registration is required again. It really is an asylum with lunatics when does Jim harra actually take some responsibility for this mess and actually spend some time in an accounting practice to understand this is his watch and he needs to resign sooner rather than later

Thanks (4)
avatar
By bendybod
06th Jan 2023 11:06

And yet will HMRC be penalised for errors in the same way that taxpayers are when an innocent tech issue causes an incorrect submission?

Thanks (7)
avatar
By sammerchant
06th Jan 2023 11:08

HMRC and IT! I despair!!

And these are the people who expect to manage MTD for IT etc? Really??

Thanks (10)
avatar
By jmgraves
06th Jan 2023 11:16

I have a client matter, covering letter with paper CGT form, sent to HMRC on 12th July 2022, with follow up 21st October 2022; both as yet neither acknowledged nor replied; at minimum a "holding" reply should be issued as a matter of courtesy. HMRC's attitude seems to be "one way" in terms of how they treat their "customers".

A separate VAT MTD case took c.15 hours of "queue" time on help lines over 4 or 5 telephone calls before being able finally to file on their new MTD system. In the old days, just a couple of minutes to put a few figures onto a form and send it off in the post....!! Such a waste of time, quite impossible to pass on any of it on to the client and huge client frustration as to why it took so long to do what I'd routinely and efficiently been doing for him for nearly two decades!

Thanks (3)
avatar
By Ralphgab
06th Jan 2023 11:22

We received two of these letters but I believe that they were correct in that the returns hadn't been filed. I can't check now as the clients have gone to a more local accountant.
What bothered me about the letters was a paragraph saying
"We recognise the value of professional agents helping customers (sic) with their tax. For information about the required standards for agents, go to GOV.UK and search 'standards for agents'

My immediate thought was "What about required standards for HMRC?"
Were HMRC insinuating that our standards were not high enough? That it was our fault that these returns were outstanding? This has been niggling me since getting the letters.
I note also that the only reference is our client reference, no UTR.

Thanks (1)
avatar
By hshubbard
06th Jan 2023 11:29

One of my clients is still waiting a tax refund for self-assessment that was submitted to HMRC in May 22. When I telephoned HMRC the advisor could provide no explanation for the delay, nor could they expedite the refund as it was "waiting in a pile" for someone to go through.... Really?!

Thanks (3)
Replying to hshubbard:
avatar
By Catherine Newman
06th Jan 2023 19:44

Yes. I have 2. One has written to his MP, the Minister for Defence and one is in the constituency of Harriett Baldwin, the chairperson of the PAC. She is not my MP but the border is extremely close and there is a mutually exclusive very dangerous road, the A46, running through both constituencies. I have told Harriett Baldwin and my MP we want Jim Harra gone.

Will everybody contact their MP as a matter of urgency.

Thanks (0)
avatar
By johnjenkins
06th Jan 2023 11:31

Is HMRC broken????????????
Seriously, Rebecca?
HMRC is not broken it's not fit for purpose and hasn't been for some time.
Many people who post on this site could do a better job. In fact that is what "agent strategy" was supposed to do.
The beauty of it is, it'll get worse.

Thanks (7)
Replying to johnjenkins:
By Nick Graves
06th Jan 2023 12:15

johnjenkins wrote:

Is HMRC broken????????????
Seriously, Rebecca?
HMRC is not broken it's not fit for purpose and hasn't been for some time.
Many people who post on this site could do a better job. In fact that is what "agent strategy" was supposed to do.
The beauty of it is, it'll get worse.

I think Rebecca was merely trying to bypass the Nanny Filter...

And the answer's yes.

And yes, it'll continue to degrade until it's totally failed. All part of The Cunning Plan...

Thanks (0)
Replying to Nick Graves:
avatar
By raju m
06th Jan 2023 16:53

HMRC staff will start working full 5 days a week once they all get bonuses of a million pound each and a pay rise of twice the inflation.

Thanks (0)
avatar
By jon dickinson
06th Jan 2023 11:35

A totally shambolic Institution whose staff are all "working efficiently from home". Third world service with no accountability whatsoever. My own staff waste at least 2 hours a day dealing with these Clowns.

Thanks (11)
avatar
By Ajtms
06th Jan 2023 11:41

In addition, I am starting to see on my agent's login that there are 31 January liabilities for cases that fulfil the criteria of being coded out next year and no "X" in box 2 of page 6. After 31 January when HMRC start answering the phone again I am going to have to waste time phoning HMRC to get it changed and then explain HMRC's continued incompetence to my clients when they receive an unnecessary payment reminder in the post. Also, having spent many hours on the phone to HMRC in October and November chasing for something vitally urgent, I have just learned from a firm of accountants in Dublin that HMRC sent their reply letter to them in Dublin rather than to me in Berkshire. The Irish accountants very kindly forwarded it on to me. There is no excuse for these levels of HMRC incompetence that is costing the country a fortune.

Thanks (2)
avatar
By listerramjet
06th Jan 2023 11:55

"HMRC has confirmed to The Institute of Chartered Accountants in England and Wales (ICAEW) and the Association of Tax Technicians (ATT) that taxpayers who have filed their tax returns on time will not receive any late-filing penalties"

Does this actually need saying? And at what point does HMRC apply penalties to itself for its errors, Given how keen it is to penalise taxpayers for their mistakes?

It sounds like they have offered a half-baked non-explanation for the issue arising and are hoping it will go away!

Thanks (4)
Replying to listerramjet:
avatar
By johnjenkins
06th Jan 2023 12:01

Oh yes they will.

Thanks (0)
avatar
By Cathy Milligan
06th Jan 2023 12:19

One of my clients received a letter from HMRC threatening to to wind the company up due to unpaid PAYE/CIS to the sum of £139,534.20.
On investigation this was my client's address, the correct UTR but the PAYE reference for another company (who's debt it was and who's name appeared on the top of page 2)
So, not only did my client suffer a major "oh my god - what is this !!!" and posssibly a minor heart attack, HMRC's lack of data protection is shocking. My client and I both know how much this other company is behind with PAYE/CIS. Disgraceful. After an age on the phone, I was asked to return the original letter and it was explained to me that someone must have made an error whist copying and pasting.......
I actually did get a phone call the following day to apologise - oh I wish I had recorded that call.

Thanks (1)
Replying to Cathy Milligan:
paddle steamer
By DJKL
07th Jan 2023 19:27

Strictly you only know what HMRC believe is the amount of the other company's arrears, its actual arrears in reality could be very different. ( I would not trust HMRC to calculate anything correctly and always check their computations.)

Thanks (0)
By kenfrost
06th Jan 2023 12:57

HMRC have ignored input on my last tax return (ie they have made an error).

I have no means of contacting them to ensure it gets corrected within the necessary time frame, other than waiting on the phone for hours.

Why is it we are the ones who have to waste time and money over errors that HMRC make?

I have, in the meantime, emailed the Ministerial Correspondence Team; but have yet to receive any response/acknowledgement!

Thanks (0)
avatar
By Postingcomments
06th Jan 2023 13:07

Is this the same HMRC that thinks it's so very clever to release figures every year about how many tax returns were outstanding at 31/12 - despite the due date being 31/1 and there being no legal requirement to file them before.

Thanks (0)
avatar
By mikejlee
06th Jan 2023 13:13

I had a client who had died. HMRC sent a letter saying"Your client no longer needs to file a tax return, but if circumstances change, please let us know"!!!!!!!. Fortunately the letter was not also sent to the deceased's widow.

Thanks (3)
Replying to mikejlee:
avatar
By jamiea4f
06th Jan 2023 13:22

Maybe they're expecting a resurrection, around Easter say...

Thanks (0)
Replying to jamiea4f:
the sea otter
By memyself-eye
06th Jan 2023 13:53

Christ, that was droll.....

Thanks (0)
Replying to mikejlee:
avatar
By Wanderer
06th Jan 2023 16:12

I've had a copy HMRC letter in the in the past, original sent to the deceased's widow, addressed 'Dear Mr Bloggs deceased', HMRC have no standards whatsoever to check that idiotic letters like this are not sent out, which causes a great deal of stress to bereaved relatives.

Thanks (0)
avatar
By jamiea4f
06th Jan 2023 13:21

Have to love the way that all these organisations blame the "system" or "computers". The "system" and "computers" only do what they are told to do, they aren't actually living, breathing, thinking organisms. Sometimes i think the old paper and personal way was much better...

Thanks (0)
avatar
By Mildred
06th Jan 2023 13:41

Oh good to know I am not solo here.... . Did think it was a glitch in their system anyway ....so never bothered to call. Hope HMRC sorts it out soon . Was going to include fingers crossed emoji but not available here.
BTW AccountingWeb, consider including emoji function in the chat...... just lightens stuff..
All work and no jest...........

Thanks (0)
Replying to Mildred:
the sea otter
By memyself-eye
06th Jan 2023 13:55

Good idea - is there an 'exasperated' emoji?

No text needed then!

Thanks (0)
By mydoghasfleas
06th Jan 2023 14:06

Worldwide disclosure format team stating,

"Foreign tax cannot be claimed as an expense. It can only be claimed as Foreign Tax Credit Relief (FTCR) in accordance with the Double Tax Agreement of whichever country the income, gain or asset was received in.

Please remove this expense and provide us with revised calculations, along with a completed letter of offer and breakdown of figures.

As removing the foreign tax as an expense in going to have a knock-on effect on the losses you are claiming, it would be counterproductive for us to supply any calculations at this time.

Once we understand the amounts you are correctly claiming for each year, we can then attempt to match those or supply calculations if we cannot.in two different cases, foreign tax paid could only be taken against the UK tax liability, it could not be taken as an expense and I would need to rework liability on a credit basis."

My full response with statutory construction as well as reference to various HMRC manuals, produced,

"I can confirm that I agree with your summary and the deductions you have made in relation to the tax suffered ......... I apologise that our previous letter was inaccurate."

The team is dealing with worldwide disclosures, so foreign tax paid must be a regular occurrence.

Q Can the training of a specialist team be so deficient as to overlook training on its specialisms? A Clearly, "Yes".

Q If you receive something you believe is wrong, should you not check it is wrong before saying so? A "No, you consider the professional who is writing to you has no understanding of tax and has made it up as they go along; i.e., they are exactly the same as you and have no idea at all!"

Q How can the initial rejection get out if the system is properly supervised? A "Supervision, what's that?"

Q How can it happen twice? A See previous answers

Q Were HMRC's letters inaccurate? A Technically, "Yes" but it implies accuracy was intended.

I know this is not systemic incompetence but it is certainly crazy incompetence

Thanks (1)
By mydoghasfleas
06th Jan 2023 14:15

Whilst it may be referred to as a mailing error, it must have happened long before mailing anything. It is a typical PBCAK - problem between chair and keyboard.

Thanks (0)
Replying to mydoghasfleas:
avatar
By Hugo Fair
06th Jan 2023 16:21

That's right ... let's all blame the deceptively innocent-looking cup of coffee! :=)

Thanks (1)
avatar
By C J EYRE
06th Jan 2023 16:46

I personally have had 3 reminder letters. My Tax Return went in in April 2022.
I had 5 clients who's Tax Returns had gone in in May/June, been accepted, but not processed. Strange, none of them got a reminder letter.

Mind you, I am still smiling that MTD has been delayed 3 years for most of my clients, so I should look on the bright side

PS - What are computer programmers going to do for the next few years, and will they now produce programmes that will actually work come the big day or will they still claim that they are waiting for information from the Revenue

Thanks (0)
avatar
By Mr J Andrews
06th Jan 2023 16:55

Haven't been lucky enough to receive any rogue reminders yet. But hopefully soon. I'll then spew out standard formal complaint letters and seek appropriate compensation for the additional administration , time and costs this latest fiasco under incumbent Harra has caused. Equally the letter will mention the distress caused to individual clients - their customers - and consequently request a full apology from HMRC to each grieved client together with a detailed explanation as to what went wrong this time around. For good measure the letter will ask what steps are being taken to ensure such shocking mistakes are not repeated. Hope in hell on this last point.

Thanks (0)
avatar
By lsoph25
06th Jan 2023 18:08

We've had HMRC establish 2 partnerships in error when an SA400+SA401 was sent in. Neither us as the agents (64-8s were also sent in with said SA400 and SA401), nor the main partner (for whom the SA401 was sent) received any notification to submit returns for this second erroneous partnership.

Late filing penalties for the erroneous partnership have been charged, we've written several letters and made several phone calls. Every phone call ends with a promise that someone higher up the chain will call us back and every letter comes back after about 7 months. Suffice to say, we're nearing 2 years of chasing, and still no closer to a solution....

Thanks (0)
Replying to lsoph25:
avatar
By lsoph25
06th Jan 2023 18:09

Oh, and we got one of the aforementioned letters for a client. A client whose 2020/21 tax return took over a year to capture...

Thanks (0)
Replying to lsoph25:
the sea otter
By memyself-eye
06th Jan 2023 18:17

Ukranian was he?

work on that one....:)

Thanks (0)
avatar
By sumo69
06th Jan 2023 19:44

I submitted a new client's Higher Rate Pension Relief claims for 17/18 to 19/20 which were received and signed for on 5th April 22 - all years claims then made in time.
I received no acknowledgement or holding letter at all - after 6 months my patience had expired so phoned the Agent Line who found the correspondence as logged on 6th April, and telling me the claim was out of date!
I said they may be correct for 17/18 if it hadn't been received by 5th April (which it was), but why had the 18/19 and 19/20 been ignored? I was assured this would be reviewed urgently.
I heard nothing so called back on 31/12 and spoke to a very sympathetic lady who completely understood my frustration which was embellished as the record show the letter had not been re-reviewed as previously undertaken!
She referred the case to a "Complaints Avoidance" Unit that I was told had just been set-up to deal with such cases where the circumnstances showed that a formal complaint could be made - I was promised a response within 10 working days (we will see..) - has anyone else been told of this?
Needless to day, little chance of charging my client for this extra time, and to make matters worse I agreed to defer half my fee until the repayment had been received from HMRC.

Thanks (0)
avatar
By adjadj
07th Jan 2023 19:56

Can these basic mistakes by HMRC be turn into an opportunity for additional fees and reduced charges to the client?
The idea: where a mistake has been clearly made by HMRC then agree the following protocol with the client for dealing with the mistake
- Bill the client for the extra work done payable in six months after being billed
- Make claim on behalf client to HMRC for extra costs incurred
- If unpaid by HMRC then reduce future client bill by the extra work billed
- If paid by HMRC then reduce future client bill by the extra work billed and also share 30% of the fee received with the client
- Repeat as necessary for future mistakes

Your revenue will increase; your client; your client will enjoy the 30% share of the fee; and when writing that letter to HMRC or sitting on hold you will have the satisfaction of thinking about the fee you are earning rather than the time wasted

PS for those adopting this approach for 2023 please donate 10% of the extra fees earned to charity

Thanks (0)
Replying to adjadj:
avatar
By Hugo Fair
07th Jan 2023 22:18

HMRC - is that the Harry & Meghan Royal Circus?

Thanks (2)
avatar
By ruth.julian
07th Jan 2023 20:33

I had 2 such letters for 20/21. One for a client who put in a one-off return to account for CGT on sale of her mother's house in 2018/19. In the white space she had written that she was now living abroad permanently and had no further UK income subject to taxation. The second was for a blind client who had retired and we got him a dispensation to not submit a tax return for 20/21 onwards as his company pension was taxed at source at basic rate, his state pension was below his personal allowances and his total income did not put him into the higher rate tax bracket. Several letters and many phone calls later, HMRC conceded they had the necessary information for both clients.

Thanks (0)
avatar
By Ralphgab
08th Jan 2023 09:38

Re HMRC incompetence, on 7th. Jan. we received a reply to an email sent on 14th. December re the infamous loan charge settlement, something we have been trying to sort since February 2019. This is remarkably quick, previously we have waited over a year for replies. This email was a response to a letter to our client where I queried why 1.we hadn't been sent a copy as agents, 2. why they always send loan charge letters during our busiest period, and 3. querying the reasonableness of their 30 day reply requirement over the holiday period and during a postal dispute.

HMRC's letter said, "I enclose a copy of the letter which I've sent to your client." - There was no enclosure.
There was an apology for not being sent a copy of the previous letter, and acknowledgement that this is a busy time, but no response to whether 30 days was reasonable.
The original enquiry was in to the 14-15 tax year, started in February 2019. In the letter to our client they are now asking for bank statements for the 2013-14 tax year! I suggested that this was out of time under Section 29 of TMA 1970, but this has been completely ignored and they have requested that the client provide the statements from nearly 10 years ago by 3 February 2023. So much for "We also understand this is a busy time". I think I will be insisting that HMRC are out of time. The lack of a reply to that point makes me think that HMRC don't disagree. I thought they might try and say it was fraud but they have said nothing.
We tried to settle this under the earlier terms, but HMRC "lost" the letter where we accepted the settlement and it still grinds on!

Thanks (1)
avatar
By roger brisley
08th Jan 2023 20:42

I was told the other day by HMRC on the agent telephone line that my agency for my wife and daughter had been cancelled as i was no longer trading.
Two issues...firstly I am still trading, I cancelled my VAT registration last year, but I'm still trading. secondly why do I need to be trading to be an agent for family members?
The HMRC agent on the phone to be fair couldn't understand it but also couldn't rectify the issue and had to leave a note on my record to ask colleagues to continue to treat me as an agent for my wife and daughter.

Thanks (0)