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Watch out for accidental HMRC self assessment fines

HMRC seem to have got a bit ahead of itself with sending out late fines for missing this January’s self assessment deadline. It hasn’t even happened yet.

What mistakes have been made?

If you pay income tax by submitting a self assessment tax return, then the deadline for the 2017-18 tax year is midnight on 31st January 2019. Yes, it’s at the end of this month, but it hasn’t actually passed yet. Unfortunately, HMRC have accidentally sent out late submission letters with the request for the £100 penalty to be paid.

It is reported that 653 people received such fines after they had already submitted their self assessment tax returns. These unlucky individuals all manage trusts and sent the requisite online tax returns before the beginning of January. They were all processed, wrongly, on the second of January.

What is the resolution?

Unfortunately, HMRC initially denied that any mistake had been made and then had to back peddle slightly with a follow-up statement: “Due to human error in processing some online trust returns a small number of trustees or agents have been inadvertently issued with late filing penalties. We apologise for any issues this may have caused our customers and are writing to them directly to let them know.”

HMRC confirmed that they know exactly which tax returns have been affected by the mistake. All associated fines have been cancelled and any that were already paid have been reimbursed.

What can we learn from this?

There are two things to take away from this situation. One, is the huge reach that government departments like HMRC have across large numbers of taxpayers.

As Robert Pullen, of Blick Rothenberg, said to the BBC: “I’m pleased that HMRC has finally admitted there’s been a mistake. The mistake was bad enough, affecting as it did more than 600 people, but if something went really wrong it could hit thousands or millions.”

Those working within HMRC have a huge responsibility and we can usually rely on their accuracy.

But they’re only human. And so the second thing we can learn is to always check the numbers; check deadlines, check your tax code, check your calculations, check HMRC’s calculations, check everything. And if it doesn’t look right, get advice from HMRC or a tax professional.

January 21st, 2019|Self Assessment|

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