I’m rich!! HMRC haven’t asked for my usual payment on account this year?
That would be nice wouldn’t it!
Actually, this happened to me this year after I submitted my 2017/18 Tax Return just before the deadline date of 31 January 2019.
Usually the tax calculations presented automatically add an amount of half my unpaid tax liability on account of next year but this year HMRC’s computer didn’t bother. The other half is usually payable on 31st July; I’m sure you probably know how the system works.
Of course, being a sensible sort of chap I realised fairly quickly that something was amiss with the HMRC computer systems. I know that this tax is really due so I just calculated the usual 50% and paid it over like a wise owl.
But apparently that’s not the end of the matter for some of us as the HMRC computer has decided that as it’s not showing as due, any amount paid over like this needs to be refunded! So HMRC just send it back to you!
We’ve called HMRC about this and they have acknowledged that this oversight is due to a glitch in their software code. A glitch that they say won’t be corrected until next year.
HMRC has told us (verbally) that those who have paid it over like good taxpayers and are then refunded in error, or who don’t pay anything because they have not been asked won’t be charged any interest for late payment. (On the understanding that the payments on account have not been reinstated for whatever reason)
But I’m not risking it! As we have nothing to back up their promise in writing.
It seems that this error mostly occurs for taxpayers that have some form of PAYE income; if you are self-employed with other rental income then it probably won’t occur.
The object of this blog is to make you aware and point out that your excuse that you didn’t realise it was due and spent it all on a world cruise instead isn’t going to wash. The wheels at HMRC may fall off on occasion or turn very slowly but they’ll always catch up with you in the end.
Our advice here is to pay over the tax as usual (we’ll tell you what is due) and if HMRC refund it in error, just put it in a savings account (or pay it back to them again) ready for when they get their act together.
Which of course they will…..eventually.
Please don’t hesitate to get in contact with us here at THP if you are still confused after reading this blog or if you need any advice or assistance come and talk to us at one of our offices in Cheam, Chelmsford, Wanstead, Saffron Walden and London City. or call us at our head office on 020 8989 5147.