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.
Tax does have to be taxing.
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