HMRC blunder – Have you underpaid tax? - Mazars - United Kingdom
HMRC blunder – Have you underpaid tax?
Find advice on how to proceed if you have received a notice from HMRC stating that you have underpaid tax, and details of a little known HMRC concession that may be of help.
In the aftermath of recent press coverage surrounding the six million people believed to be embroiled in HMRC’s tax blunder, it is reported that in the region of 1.4 million taxpayers will shortly be forced to pay an average of £1,500 in underpaid tax.
This, for the average taxpayer, is likely to have a significant impact on their future income stream, as the underpayment will be deducted from their earnings over the forthcoming tax year(s).
If you are one of the unlucky ones to have received, or are shortly about to receive, a tax demand, there is a useful concession, whereby in limited circumstances HMRC may agree to not collect any arrears of income tax or capital gains tax if the arrears result from HMRC’s failure to make proper and timely use of information supplied to them in relation to an individuals tax affairs.
Extra Statutory Concession A19 (ESC A19)
ESC A19 applies to individuals who owe income tax or capital gains tax and where that individual thinks that HMRC should have already collected the tax due because that individual has supplied the relevant information to them and HMRC have failed (or delayed) to use this information.
The basic premise of ESC A19 requires an individual to have supplied information to HMRC in relation to their tax affairs and HMRC to have failed to use the information received, again within certain time limits. ‘Information’ is specifically defined in this context and could include for example providing details of a change in job, or providing details of an additional taxable benefit provided by your employer. The time limit that applies is where HMRC should have used information supplied to them within 12 months after the end of the tax year in which the information was received
There are of course various other conditions that need to be met in order to submit a successful claim to HMRC in this regard, and any claim should be carefully considered. If you have any concerns regarding this, or would like assistance in making a claim and would like to speak with a member of our team, please do not hesitate to contact either Jon Claypole or Stephen Outhwaite of our Tax Risk and Investigations Management team.
Even if the Extra Statutory Concession does not apply, Mazars’ advice to anyone receiving a notice from HMRC over the next few days is to check that notice carefully to ensure it is correct.
Jon can be contacted on 07799 033089 or jon.claypole@mazars.co.uk
Stephen can be contacted on 07794 031401 or stephen.outhwaite@mazars.co.uk
Contacts
Stephen Outhwaite
Senior Manager - Tax Investigations
+44 (0)113 204 9797
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- Copyright 2012 - Mazars - United Kingdom
