Ross McConnell - Kinross Based Chartered Accountant

HMRC Bouquets

by ROSS MCCONNELL on APRIL 15, 2019

A Personal Apology With Your Tax Error

Hands up if you have received flowers since 2014. Now keep your hand up if they were sent to you by HMRC. 

No-one? Me neither, and frankly I’m a little disappointed.

It turns out that HMRC spent £10,298 between 2014 and 2018 on flowers. The bouquets were given to taxpayers by way of an apology, after a mistake was made by HMRC, where the error affected vulnerable or recently bereaved people. 

In one reported case a pensioner was due to receive a refund of £800 but instead received a cheque for £1. In another case a Stockport café was mistakenly sent a tax demand for £1bn! It would take more than a bunch of flowers to make amends for that shock. (The real tax bill was closer to £17,000.)

HMRC apparently felt that flowers were ‘a more personal gesture to put things right’ when things had gone wrong, which might well be true; but they were also quick to stress it was not a way of them avoiding paying financial redress to those affected by mistakes. (The flowers – or more precisely the bill for the flowers – drew so much attention last year the approach has now been dropped – so don’t expect a bouquet anytime soon.) 

That said, there are more than a few people to whom redress is likely still due. In its annual review of HMRC for the most recent full tax year (17-18), the National Audit Office found that HMRC raised £605.8 billion of tax revenues. That was an increase of £30.9 billion (5.4%) on 2016-17. Even an error rate of one tenth of a penny on all those returns – or affecting one taxpayer in every 1000 – would see millions of pounds of tax revenue wrongly assessed in some way. Florists across the UK are no doubt devastated that the policy has changed!

HMRC also paid out £38 billion in benefits and credits in the last full tax year, approximately one-fifth of the government’s total benefit expenditure, with Child Benefit the major portion of that figure. Interestingly, two-thirds of errors estimated for 2016-17 relate to Child Benefit, that’s a total of £105 million that relates to claimants who are deemed ineligible and have had their Child Benefit stopped. 

This is the time of year when many of us do receive something from HMRC; not flowers, but a letter reflecting our tax code for the new tax year. 

Now if you believe HMRC have miscalculated something in setting your new code then the figures above show it could well be true – the Revenue can make mistakes, after all they are human. 

So don’t just assume that the figure in the letter is correct; check it – and if you have any doubts call them to discuss it. Or remember, if you hear of anyone having trouble with HMRC that would make a good referral for me. It could save hundreds, perhaps thousands of pounds, and that’s got to be worth a second look.

Just don’t expect me to give anyone flowers.

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