Miscalculations & inconsistent advice: tips for dealing with HMRC

If you deal directly with HMRC for your tax affairs it can be a frustrating business, with technical errors, poor communications and inconsistent advice.

Here are some tips on how to minimise stress-levels when dealing with HMRC, and ensure the advice – and calculations – are correct…

Recently, HMRC has been under scrutiny regarding their approach to complaints from taxpayers, and the lack of clarity around some of its online guidance, both of which can cause a headache for those dealing with their own tax affairs.

There are many taxpayers who chose to deal with their own tax affairs for a variety of reasons. My fear for such individuals, and any businesses they own, is that HMRC is not always right. They may get technical points wrong or simply the calculations.

Some of my previous experiences have included HMRC:

• Taking an inconsistent approach to calculating tax;
• Refusing to explain how they have calculated their figures;
• Giving conflicting advice;
• ‘Shrugging’ when we have pointed out that their own computer systems are not dealing with issues correctly – this in itself frightens me with the headlong dash to the digital world with the Making Tax Digital initiatives.

HMRC miscalculations and broken calculators

HMRC offers publicly available, online tools to help taxpayers to calculate their potential tax liabilities and identify what actions they may need to take. The only hitch is that not all of them are working quite as they should…

It has been reported recently that HMRC’s Stamp Duty Land Tax (SDLT) calculator is not calculating liabilities correctly in certain situations, such as on mixed-use properties, and leaving purchasers with SDLT liabilities that are coming out too high.

Also, the child benefit calculator has not been updated for the current tax year, meaning that those who need to ‘fine tune’ their affairs to secure the necessary tax breaks are not able to do so. For example, families may want to make pension contributions to reduce their taxable earnings to below the cut off threshold but haven’t had the necessary information to be able to do this accurately.

Tips for avoiding frustration

Dealing with HMRC can be slow, often taking many weeks to receive a response to a query. I have lost count of the number of times I have had a different response to the same issue when talking to a different staff member at HMRC. As an experienced tax adviser with over 30 years’ experience under my belt, I can tell when an answer may not be quite right, but what hope does an unrepresented taxpayer have?

To maximise your chance of a successful outcome and to reduce the associated stress and frustration, I would urge all taxpayers dealing with HMRC to:

• Take notes of calls, including the name of the person you are speaking to;
• Put matters in writing so that you have a record;
• Complain when you believe you are being badly treated; and
• Push on until you get a satisfactory conclusion or resolution.

If you have any doubts you should always seek professional help – the costs may be more than outweighed by the tax savings and reduced stress levels!

Advice for HMRC?

Whilst I appreciate that HMRC is resource constrained, it is vital that it invests time and money to address the problems and get the basics right. My suggestions include:

• Making sure that online tools and calculators work and are up to date;
• Dealing with issues promptly;
• Moving with the times – e-mail communication is the norm not the exception; and
• Accepting that taxpayers want to pay the right amount of tax and understand how the amount has been calculated.

For support with your tax affairs, or if you need help resolving an issue with HMRC, please contact us.