HMRC Is Shite

HMRC Is Shite
Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.

Monday, 2 July 2012

HMRC Misled Taxpayer

A recent tax tribunal has concluded that HMRC “misled” a small business owner over the scope of his Time-to-Pay (TTP) arrangement relating to VAT, the result being that the £4.5K default surcharge levied by HMRC has been quashed.

Contractor UK reports that the first tier tax tribunal found that the businessman had a “reasonable excuse” for a string of defaults, arising because he thought his TTP arrangement continued after the VAT period of 11/2008.

His financial difficulties continued after the period (to the extent his company was forced to close); he regularly spoke to tax officials on the phone, but was never advised by HMRC that the arrangement to defer his VAT liability had expired.

HMRC contended it only agreed a single TTP arrangement for Value Added Tax prior to 11/2008, not the four subsequent VAT periods (as the taxpayer claimed). However, a first tier tax tribunal judge was unconvinced.

The tribunal reviewed HMRC's phone logs and concluded that the taxpayer had been “misled” by HMRC and the VAT default surcharges totalling £4,539.84 in respect of the VAT periods 02/09, 05/09, 08/09 and 11/09 be discharged in full. A default surcharge is a penalty levied on businesses that submit late VAT returns or late payments.

This case highlights the importance of keeping accurate records of meetings, correspondence and phone calls with HMRC.

Tax does have to be taxing.

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  1. No wonder it is referred to as Levying Distress!

  2. Or causing professional discomfort

  3. Is it £4,539.84 OR £4.5 million?? Evidently it isnt only HMRC that gets things wrong

    1. Indeed.... seems that we, as readers, are also being mislead, perhaps?

    2. Explain please.

    3. Quite right, thanks for pointing that stupid error out.

      Mea culpa!

    4. You may have to explain what "error" means for the benefit of any HMRC management seeing this.

    5. I could understand why a case worth £4.5 mill went this far but £4539.84?

      Then again HMRC treats large corporations the same as the little people doesn't it!

  4. Hi Ken,

    Please don't view this as some kind of 'aggressive challenge' but if you were to be appointed head of HMRC's debt collection area, what would you change? What stance would you provide in terms of negotiating TTP arrangements? How would you do this in a manner, in terms of competition, which protects businesses that do pay tax on time, from those that do not?