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HMRC system error could lead to fines for the self-employed – will you be affected?

3-minute read

Lauren Hellicar

14 January 2019

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A technical glitch in government systems means some taxpayers have received inaccurate payment reminders, and not paying the correct amount of tax you owe can result in fines.

With the January Self Assessment deadline fast approaching, the last thing self-employed people need to worry about is receiving the wrong payment amount from HMRC. But that's exactly what's happened to some people, according to a report in The Telegraph.

Payment on account not included

The problem affects taxpayers who’ve already filed their tax return for the previous tax year. The amount you pay should include a ‘payment on account’ for the next tax year.

However, the technical error means this part of the payment has been excluded from some HMRC payment reminders.

You can find out more about what payment on account is in our guide to payment on account for the self-employed.

Advice from accountants

Stephanie Tremain from London accounting firm, Blick Rothenberg, warned that follow-up payment reminders could be wrong. This means there's a risk that the self-employed would be charged interest on any late payments, according to The Telegraph.

Ms Tremain said: "Taxpayers will understandably rely on the information sent to them by HMRC, but for peace of mind it's important that they double check the amount due in January 2019 with their accountant, or for those without an accountant, they need to check their completed 2017-18 tax return."

Double check what you’re due in January

The last day of January is the deadline for the self-employed to submit their tax return online. For those who have payments to make by the 31st, the amount will include the final payment for the last tax year and the first of two advance payments for the current year.

Read more about the Self Assessment deadline for tax year 2017-18.

Who has been affected?

An HMRC spokesman said the error only affected 2017-18 tax returns, and added: “We are aware of an issue with payment reminders for a small number of customers. Anyone who is affected should contact us and we’ll put it right. Nobody will be charged additional interest due to this problem.”

Reasonable excuses for not paying the tax you owe describes a reasonable excuse as: “something that stopped you meeting a tax obligation that you took reasonable care to meet”, and reminds taxpayers that they must pay as soon as their reasonable excuse is resolved.

Examples of reasonable excuses given include:

  • your partner or another close relative died shortly before the tax return or payment deadline
  • you had an unexpected stay in hospital that prevented you from dealing with your tax affairs
  • you had a serious or life-threatening illness
  • your computer or software failed just before or while you were preparing your online return
  • service issues with HM Revenue and Customs (HMRC) online services
  • a fire, flood or theft prevented you from completing your tax return
  • postal delays that you couldn’t have predicted
  • delays related to a disability you have

Not so reasonable excuses

Some taxpayers have really tried their luck in attempts to get away with not fulfilling their tax obligations.

You can read some of the best weird and wonderful 'reasons' in our article, which includes the excuse, “I couldn’t file my return on time as my wife has been seeing aliens and won’t let me enter the house”.

Read HMRC’s latest list of ridiculous tax return excuses and expenses claims.

Have you been impacted by an HMRC error? Let us know in the comments.

Looking for self-employed insurance?

With Simply Business you can build a single self employed insurance policy combining the covers that are relevant to you. Whether it's public liability insurance, professional indemnity or whatever else you need, we'll run you a quick quote online, and let you decide if we're a good fit.

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We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

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