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Bring on the penalties
The Chartered Institute of Taxation has published the following announcement received from HMRC concerning self assessment penalty notices:
'Since [31 January 2007] we have been very busy logging the returns onto the computer. This is a mammoth task — as many as one million paper returns come in during the last two weeks of filing — and it is given top priority in our processing offices. We are pleased to be able to tell you that we have now completed that process and have just begun issuing the penalty notices for failure to file on time.
'Given the scale of the logging operation, we expect that there will unfortunately again be cases where a penalty notice is issued incorrectly even though we have put a lot of effort into reducing the number of errors. We have, however, made a number of changes to the logging process to reduce the scope for error, including automatic logging and batching functionality. As you would expect, we manage the process very closely, and we are introducing “lean” processing techniques to help improve quality. But we nevertheless get some returns logged with the wrong date or (where a return for another year has been adapted) for the wrong year.
'We fully understand the irritation and extra work caused by incorrect penalty notices, and apologise in advance if any of your members need to handle any. The penalty notice itself tells people what to do and how to contact us if they are not sure why they have received it. The contact point will be the issuing office at the address given on the notice.'
Forewarned is forearmed! While incorrect penalty notices are an irritation to tax advisers, they do at least know how to deal with them. Unrepresented taxpayers sent incorrect penalty notices may be more intimidated, regardless of HMRC's comment that the notices explain what to do in the event that the return was sent in on time. Perhaps another advertising campaign warning of this problem is the answer …
www.tax.org.uk
Pensions
HMRC have published guidance on how payments made in genuine error are treated under the tax rules for registered pension schemes. Currently the guidance is in a standalone format but it will be incorporated into the Registered Pension Schemes Manual in due course.
www.hmrc.gov.uk
