H M Revenue and Customs is in the news for the wrong reasons recently, in reports that may be worrying many businesses and their employees. The HMRC recently announced that the tax bills of around 6 million UK taxpayers may be incorrect. It seems these particular errors have been made as the result of one specific error. It has further been reported that a new computer system has uncovered errors in Pay As You Earn (PAYE), or Schedule E tax, totalling £2 billion.
Bearing in mind that Schedule E is now the simplified system which will prevent people getting into arrears with their tax, this raises concerns about how many errors are made in the calculation of Schedule D tax for the self-employed.
This highlights the need for using an accountancy firm. Not only do professional accountancy services have the staff and software to ensure that your tax bill is correct, they are also able to ensure you do not pay tax demands unnecessarily. This might sound strange on the face of it, but the current set of errors by HMRC is a good example of why using an accountancy service is so important.
The HMRC plans to send bills to all the taxpayers it believes have underpaid. However, many taxpayers will not be obliged to pay using a rule called A19 Extra-Statutory Concession. If they provided all the necessary information for their tax bills to be calculated, and H M Revenue and Customs had that information for twelve months without querying it in any way, it may mean that some taxpayers need not pay their bills or at least get an extension of time to pay. However, they do need to communicate the basis on which they are refusing to pay clearly and time will tell what will happen.
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