Self Assessment

Author
Discussion

SIR MP

Original Poster:

1,295 posts

260 months

Wednesday 14th March 2007
quotequote all
Chaps,

I received an assessment in Jan 07 (for the tax year 01/02)
which I paid in Feb 07.
Today I got a statement showing £415 accrued interest overdue,
are they trying it on or what?

MP

Piglet

6,250 posts

256 months

Wednesday 14th March 2007
quotequote all
I used the online self assessment in January and the system kept telling me I was due a credit of £130, I double checked all of the figures as it was clearly incorrect as it should have been around a small amount due to the IR.

I didn't have time to go into the tax office so I just submitted it, they sent me the cheque and I banked it - yesterday I get an invoice for the small amount and the amount they have overpaid me!!

At least they've not had the nerve to try to fine me or charge me interest!!

Eric Mc

122,109 posts

266 months

Wednesday 14th March 2007
quotequote all
How can we tell?

If you are paying tax four years late, I would expect interest charges.

The final payment date for taxes due in respect of the year 2001/02 would have been 31 January 2003. If a balance has remained outstanding from 31 January 2003 to only a few weeks ago, then an interest charge (plus Surcharges) would have been normal. The interest and surcharge amounts would have been calculated as percentages of the outstanding tax balance allocated over the number of days the tax balance remained unpaid.


Edited by Eric Mc on Wednesday 14th March 13:22

SIR MP

Original Poster:

1,295 posts

260 months

Wednesday 14th March 2007
quotequote all
Hi Eric,

Yes but I did'nt know I owed anything until Jan 07 when I received the assessment, then I paid it as quickly as I could.
I thought it was'nt supposed to be taxing anymore

MP

SIR MP

Original Poster:

1,295 posts

260 months

Thursday 15th March 2007
quotequote all
Is that it then, they can raise an assessment when they feel like it and back date the interest. Anyone else challenged the system or do we roll over ?

Mp

Eric Mc

122,109 posts

266 months

Thursday 15th March 2007
quotequote all
They can raise an assessment if you are correctly liable for interest on arrears of taxation paid. The taxes acts allow the Revenue to charge interest (and penalties) when taxes have not been paid on their statutory due dates.

If you do not agree with the figures they have arrived at, you can appeal against the assessed amount stating the grounds for your appeal.

SIR MP

Original Poster:

1,295 posts

260 months

Thursday 15th March 2007
quotequote all
So I could appeal the interest charge on the basis that the assessment for tax could not have been paid any earlier than when I first received notification of the taxation due, ie Jan 07 ?

MP

Eric Mc

122,109 posts

266 months

Thursday 15th March 2007
quotequote all
Tax law states that it is the TAXPAYER'S legal obligation (under the Self Assessing rules) to notify the Revenue of any tax liabilities due. If, for whatever reason, the taxpayer fails to do this and consequently ends up paying the due tax well after the statutory payment date, the Revenue are absolutely within their rights to charge interest on the outstanding tax amount for the period from the original due date to the date the tax was actually paid.

Indeed, they could charge penalties as well due to the fact that the taxpayer failed to notify them at the correct time - although they have the discretion to waive or mitigate penalties if they so wish.

SIR MP

Original Poster:

1,295 posts

260 months

Thursday 15th March 2007
quotequote all
Thanks for the detailed reply, when was this Self Assessment BS introduced?

MP

Eric Mc

122,109 posts

266 months

Thursday 15th March 2007
quotequote all
It was introduced in stages - 1994/95 for Partnerships - 1995/96 for individuals.

SIR MP

Original Poster:

1,295 posts

260 months

Thursday 15th March 2007
quotequote all
But my assessment relates to the tax year 01/02, so does it apply retrospectively?

MP

Eric Mc

122,109 posts

266 months

Thursday 15th March 2007
quotequote all
That's WHY the interest is being charged. Your legal due date for paying 2001/02 tax was 31 January 2003. The fact that the Revenue only found out recently that you had a tax liability in respect of 2001/02 does not release you from the obligation to clear the liability by January 2003. The Revenue are therefore at liberty to seek the interest on the late payment.

SIR MP

Original Poster:

1,295 posts

260 months

Thursday 15th March 2007
quotequote all
Is there a negotiating position and do they do deals or am I stuffed?

MP

Eric Mc

122,109 posts

266 months

Thursday 15th March 2007
quotequote all
They won't reduce the amount due - but they might allow you to pay it over (say) six months.

Seeing as how it is relating back to a very old debt, they might not be as amenable as they sometimes are.

What is the situation for more recent years?

Plotloss

67,280 posts

271 months

Thursday 15th March 2007
quotequote all
Eric Mc said:
They won't reduce the amount due


As he is patently the accounting sage I wont disagree with Eric but I do have direct experience of them wiping off over £1000 worth of fees, fines and interest over late SA returns.

Their behaviour in my case was appalling and my case file was littered with their errors but I did get a load of fines and fees wiped off after a LOT of argument.

Eric Mc

122,109 posts

266 months

Thursday 15th March 2007
quotequote all
They won't cancel tax amounts due - but they will cancel or reduce interest and penalties for various reasons -

i) the taxpayer has been co-operative

ii) the Revenue are to blame in any way

iii) there were mitigating circumstances surrounding the taxpayer (and "I forgot to complete a return" or "I didn't know I was supposed to complete a return" would not be acceptable mitigating circumstances).

I've had penalties and interest cancelled for reasons i) and ii).

SIR MP

Original Poster:

1,295 posts

260 months

Thursday 15th March 2007
quotequote all
There is probably more recent stuff to come out of the closet, but until I receive an assessment, oh dear here we go again !

MP

Eric Mc

122,109 posts

266 months

Thursday 15th March 2007
quotequote all
I wouldn't wait.

Get yourself sorted - they are on to you now so burying your head in the sand won't achieve anything.

Seany88

1,245 posts

221 months

Thursday 15th March 2007
quotequote all
Should you complete self-assessments for BTLs?

Eric Mc

122,109 posts

266 months

Thursday 15th March 2007
quotequote all
Absolutely.