Enter Your E-mail

Unwanted Mail from HM Revenue & Customs

I recently received a 'PAYE late payment penalty warning' letter from HMRC for my company in respect of the 2011-12 tax year. It warned: "Paying late puts your business at risk of extra costs in the form of penalty charges".

However, I immediately knew that the letter was incorrect, as my company's PAYE liability is paid electronically at the same time as salaries. Unfortunately, the letter had no HMRC address or telephone number to contact, so I had to visit the HMRC website to find a telephone number to contact them.

Telephoning HM Revenue & Customs

I rang the appropriate HMRC 'helpline'. It was one of those recorded messages in which I was given several options to choose. After going through this process a few times, I reached my final destination...and a 'hold the line' message. I waited for 15 minutes before I was put through to someone. I explained that I had received the warning letter, and gave the dates and amounts of PAYE remittances for April, May and June.

I was informed that the warning letter was effectively my fault...for paying the PAYE too early. Apparently, if you pay a PAYE liability too early, HMRC could allocate the payment to the wrong month. This may result in two payments being allocated to one month, and none being allocated to the other month (common sense dictates that PAYE liabilities and payments would be reviewed and reallocated if necessary before a warning letter is issued, but unfortunately it seems that HMRC's computer is not programmed to do common sense).

Whose Mistake?

The payment mis-allocation was corrected. I was also told that it was not necessary to respond to PAYE warning letters. I assume that this is why there are no HMRC contact details in the warning letter (or is it because HMRC knows that many of them will be incorrect?). Unfortunately, what HMRC fails to appreciate is the impact that a warning letter can have on taxpayers (including on me), particularly when it has been incorrectly issued. To cap it all, I lost about 30 minutes of working time in dealing with the problem.

I am sure that other taxpayers have had to deal with far worse problems with HMRC. The point I am making is that taxpayers are accountable to HMRC if they make a mistake. However, this accountability seems to be a one way street at times. If HMRC deems it appropriate to send out PAYE warning letters, they should at least try to ensure that the letters are correct, and provide contact details in case they are wrong.