Taxing Affairs

People complain about the Inland Revenue. Of course they complain about the taxes they have to pay. But they also complain about the level of service they get from the people in the tax office. Sometimes they might question the level of intelligence of people in the tax office.

Here’s an example of why they might do that. It concerns my company’s VAT return.

At the end of November I needed to fill in a VAT return. My accountants have a great online system where it does all that calculation for me. I can even submit the return online. The only thing it doesn’t do is to transfer the money to HMRC.

So on the 29th November I logged in to my account and saw that I needed to pay HMRC £X. I logged into my company bank account and transferred £X to HMRC’s account.

In December I went off on holiday.

In early January I returned from holiday and found a letter from HMRC saying that I hadn’t submitted a VAT return and that they had therefore estimated my payment as £Y. £Y was less than £X.

I emailed my accountant, she looked into it and soon realised what the problem was. Although I had made the payment for the VAT owed, I hadn’t actually submitted the return. I logged on and did that immediately. This should have been the end of the matter.

This morning I received another letter from HMRC. One written on 9th January. Today is 17th January. I don’t know what mechanism HMRC use to send letters, but it’s not particularly fast.

This morning’s letter said that my company had an outstanding VAT debt of £377.30.

£377.30 is £X – £Y. That is, it is exactly the amount by which the the payment I made was greater than their estimate of my liability.

This is very confusing. I have paid more than their estimated that I owed and they still think that I owe them money. I have no idea how they could have reached that conclusion.

But I hope my accountant can find out when she gets back to her office on Monday.

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