The Taxman's Error

If the taxman sends you a late filing penalty notice yet you have sent it within time, then this is what you can do about it.

The Penalty

The taxman can send you a £100 penalty if you file you tax return late. This means filing your 2002/2003 self-assessment personal tax return before January 31st 2004, you will be sent an official notice of the penalty if it isn’t filed in time. You will then have an extension to the 31st July 2004, if you still haven’t filed your return by this date you will incur another £100 fine. But what happens if you didn’t send it late?

The Error

Recently the Taxman admitted that he had sent out some £100 fines to taxpayers even though they had filed their 2003/2004 tax returned before the deadline. It has been estimated that in between 250,000 and 500,000 of the 950,000 tax returns sent by the taxman’s computer were in fact an error.

The Apology

The taxman has apologised for the error publicly on his website to all those who have wrongly received a penalty notice. The error was discovered when a number of tax payers queried the penalty notices. The taxman will cancel a wrongly issued notice and also consider compensation claims for costs that are a result of his mistake or delay.

What to do

The taxman will not automatically cancel penalties that are sent out in error and he will keep the proceeds on cancellations where the fine has already been paid, unless asked to repay them formally.

1. If you have received a penalty notice wrongly you should write to your local tax office to secure cancellation of the fine, also ask for a refund if you have already paid.
2. To claim compensation you must prove the costs that have been incurred due to the error, to do this you will need the bill showing your advisor’s fees.
3. Keep everything formal and polite to help ensure you receive what is owed.