Hundreds of taxpayers hit with late filing penalty despite submitting their tax return early

Although HMRC initially denied the mistake, they’ve now been forced to backtrack.

There’s no getting around the fact that Self Assessment can be stressful. But imagine getting your tax return done-and-dusted weeks before the deadline – and still being slammed with a late payment penalty.

That’s what happened to 653 people who submitted their return at the start of January. The BBC reports that HMRC sent them letters saying they’d missed the deadline and requested £100 as a late penalty, even though the deadline was still nearly a month away.

What’s more, HMRC initially issued a “strongly-worded statement” to the BBC that denied any issues with early penalty notices, but backtracked when they finally noticed the problem.

Two years of wrongly issued fines

Dan Neidle, tax partner at the law firm Clifford Chance, was one of the 653 people who received a letter.

He was also wrongly issued a late payment penalty last year, when he claimed that “something is going wrong” with HMRC’s automated penalty filing system.

The tax expert told the BBC: “I thought, oh no not again, as they did it to me last year even though I filed on time. The difference this time was that they sent the late-payment fine before the 31 January deadline.”

Mr Neidle was able to laugh off the error, suggesting he’s going to frame HMRC’s apology letter. But as we noted last year, more vulnerable taxpayers might be scared by these demands for payment – and end up settling a fine they don’t owe.

‘Human error’ to blame

The error related to online returns processed on 2 January by taxpayers filing for trusts that they manage.

HMRC first tried to deny they’d made a mistake, saying that ‘any assertion’ they’d messed up was false, but later admitted: “Due to human error in processing some online trust returns a small number of trustees or agents have been inadvertently issued with late filing penalties.”

Those penalties have now been cancelled, and HMRC say they’ve sent apology letters to everyone affected.

How do I change my Self Assessment tax return?

The Self Assessment deadline is 31 January each year. Although HMRC has corrected the mistake they made with these early returns, it’s important to check your return carefully to make sure you’re paying the right amount of tax.

If you notice you’ve made a mistake after filing, don’t fret – it’s possible to change your return. The deadline for making a change for the 2017-2018 tax year is 31 January 2020 – you may need to pay more tax or be able to claim a refund, depending on what you report.

Read more: tax return changes – how to I change my return after filing?

Have you ever been affected by a wrongly issued late payment penalty? Let us know in the comments below.

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