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Taxpayer confusion: HMRC issues inaccurate self-assessment statements

A number of taxpayers, including buy-to-let landlords, have been left feeling confused after HMRC issued self-assessment statements to individual taxpayers which do not show their second payment on account due to be paid by tomorrow (Wednesday).

The error may result in large unexpected payments and interest charges, according to accounting and tax advisory firm Blick Rothenberg.

“This is a total fiasco, and the issue first arose in January when people were required to make their 1st payment on account [due by 31 January 2019].” said Nimesh Shah a partner at the firm.

He added: “Due to a system error, HMRC had not generated payments on account for 2018/19 for some taxpayers.  A number of statements have been issued by HMRC that do not show anything actually due on 31 July 2019.

“HMRC are aware of the issue but have not corrected it, despite it being a known problem for 6 months. If a person has received a statement, which does not look correct, and does not include a second payment, which they feel is due, they should contact HMRC immediately.  Similarly, you may not receive a statement at all, and so it’s worth double-checking.”

HMRC have confirmed that they will not apply late payment interest if a payment was due but not showing on their systems. But the safer approach is to make the payment you believe to be due and not necessarily rely on HMRC.

Those who choose to refer to HMRC’s statements and not make their second payment on account are likely to have a much bigger tax payment in January 2020 – as they will not have made any advance payments on account, HMRC will want their full 2018/19 tax liability, as well as the first payment on account for 2019/20.

Nimesh added: “HMRC have known about this problem for over 6 months now, and they have not done anything about it, and taxpayers are facing the same confusing issue again. 

“Once again, HMRC’s communication around a known problem has also not been good enough, and individuals have to either discuss the correct course with their accountant or follow-up with HMRC to confirm exactly what they should be doing.”

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