HMRC have reported a glitch in their self assessment system, almost 2 years after a similar problem occurred.
The glitch means that some taxpayers were not informed of the amount of tax they had to pay on their account by January 31st 2019.
The error has happened to some taxpayers online personal tax accounts, and paper statements.
HMRC are fully aware of the slip up, stating:
“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.”
They’ve also stated that the problem cannot be fixed in time for the 31st July payment date.
How Will This Affect Taxpayers?
Being Charged Interest
For those affected, the initial worry is that the ‘missed payment’ that they were never notified of will incur interest until the next payment date – leaving them with a bigger bill than before.
However, HMRC immediately confirmed that if the demand for a payment on account was left out of a taxpayer’s statement, the taxpayer will not be charged any interest, providing the payment is made in full at the next request.
If, for whatever reason, the taxpayer is charged interest because of this mistake they (or their accountant) are encouraged to contact HMRC as soon as possible to fix the charge.
A Large Bill Down The Line
The other worry is that HMRC will charge this ‘missed payment’ later on down the line.
Instead of requesting the payment in January 2019, HMRC have confirmed they will request it in January 2020. This will mean that the taxpayers bill in January 2020 will be larger than expected.
There are two options for those affected:
1. Make A Voluntary Payment On Account
Using your own calculations, you can determine the payment HMRC should have requested in January 2019. You can then voluntarily make a tax payment towards your account and clear the payment now.
However, HMRC’s systems aren’t always trustworthy and have a habit of ‘glitching’ every now and again. If you make a voluntary payment, there is a risk that it might not be allocated to the right place.
The missed payment may also already be classed as ‘paid’ by HMRC, hence the long delay past July until a taxpayer will be requested to make a payment.
2. Deposit The Tax Payment Into A Savings Account
The other option is to preempt the larger payment in January 2020, and save the tax due in a savings account until you are requested to pay in January 2020.
If you’ve been affected by this HMRC software glitch and still have questions after this blog – do get in touch!
We believe your accountant should be on hand to help with the financials, especially when you don’t understand what the best decision to make is.
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