HMRC slips up again and sends incorrect penalty notices!

Will HMRC ever get it right?! Accountants will no doubt be aware that the Revenue has been sending out final reminder letters to taxpayers who have failed to make self assessment payments.

However, it now transpires that 17,000 final reminders have been sent to taxpayers who have already settled their outstanding income tax liabilities with HMRC.

The problem was first reported last week when a pensioner received a final reminder letter for a payment he made last December. Since then similar cases have come to light and taxpayers say the letters warn that further penalties will be incurred if the tax is still outstanding after three and six months and their case may be referred to a debt collection agency if they fail to take action.

A Working Together co-ordinator for the Revenue said the department was aware of the issue. The official comment released by HMRC was that some customers who had paid balancing payments for 2010/11 on time might have received SA359 Payment Reminders.

Apparently, despite the funds being allocated to the correct customer accounts, payments received by the Revenue between the 14th and 16th December were not set off against outstanding charges until after this batch of reminders were selected for issue.

HMRC has since apologised for the problem and cancelled the penalties. But is an apology really good enough? Pensioners in particular get extremely worried when they receive this sort of penalty notice, especially if it contains words like debt collection agents. It really is time HMRC cleaned up its act and got it right first time, every time!

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