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HMRC errors uncovered: are you due a tax refund?

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HMRC software errors mean you might be due a refund if you filed a self-assessment tax return in the 2013/14 tax year.

According to George Bull, a senior tax partner at RSM UK, errors in HMRC’s income tax self-assessment software meant that “a number of clients overpaid tax which we subsequently had to reclaim from HMRC on their behalf”.

What happened?

When a return is filed online, HMRC compares the tax figure using commercial software to the one its software has calculated. If the figures do not agree, HMRC will not accept the submission.

In 2013/14 commercial software correctly performed the calculations but HMRC’s computers refused to accept the returns.

“We were advised that the calculations were wrong and had to edit the returns to show the higher figure before HMRC would accept the returns,” says Bull.

Then in 2014/15 Bull says he was “confused to find that HMRC were now accepting returns prepared on the basis which had previously been rejected”.

He adds: “It became apparent that HMRC had discovered they were wrong and corrected their computation, but had not told us.

“This meant that a number of clients had overpaid 2013/14 tax because they had followed HMRC’s rules. We are now claiming back thousands of pounds of overpaid tax on behalf of those clients.”

Who could be affected?

As far as Bull understands, all independent software providers suffered the same problem because they are required to comply with a standard set by HMRC to submit a self-assessment tax return.

So if the standard set by HMRC is incorrect, all tax returns software will be wrong.

Bull says this matter requires attention now as HMRC moves towards introducing online accounts.

“At the very least, it should be possible to file a computation on line, even if does not accord with HMRC’s software. HMRC would lose nothing because, if the tax figure was subsequently found to be wrong, interest would be recoverable from the taxpayer,” he says.



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