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Inaccurate Self Assessment statements may result in unexpected payments

Taxpayers in any doubt should pay by Wednesday.

HM Revenue & Customs (HMRC) have issued Self Assessment statements to individual taxpayers which do not show their second payment on account due to be paid by this Wednesday 31 July, which is causing confusion and might result in large unexpected payments and interest charges.

“This is a total fiasco, and the issue first arose in January when people were required to make their first payment on account (due by 31 January 2019).” said Nimesh Shah, a partner at Blick Rothenberg.

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 six 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.”

This is a total fiasco, and the issue first arose in January when people were required to make their first payment on account.

HMRC have confirmed that they will not apply late payment interest if a payment was due but not showing on their systems. However, 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. It’s therefore important to keep the money to one side.

Nimesh said, “HMRC have known about this problem for over six 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.”

For more information, please contact Nimesh Shah.

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