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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3823
Experience:  FCCA FCMA CGMA ACIS
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we were a small family business in the construction industry...

Customer Question

we were a small family business in the construction industry... 20% which was deducted from our invoices was claimed in the p35 instead of the self assessment. Not being a limited company this was an error on our part and led to a discrepency of the amount of tax owed. At the initial stages of this query we owed app. 26k and this carried an interest charge of app. 7k. The amount due dropped by app. 24k leaving an outstanding balance of app. 2k which we have since paid and the matter has been resolved. We are now being asked for an interest payment of app. 5k and this is what we are querying. As the revenue had this money, obviously not in the correct account, do we have a valid case to persue a tribunal?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.

Hello, I'm Keith and happy to help you with your question.

HMRC do charge interest on last payments of tax die, but, be fair, they do also pay interest on delayed tax refunds! You would appear to be pursuing the right approach by asking HMRC for a breakdown of the interest being claimed. If you have received no response the take it up again and maybe again and again. If HMRC press your organisation for the payment just decline and remind the department of your request of the breakdown of the charges. Eventually your persistence will reach a level where someone of some intelligence is employed and you will receive the data you require.

I suggest that a letter approach is the way forward at present rather than the expensive option of going to the tribunal at this stage.

I do hope I have shown you a way forward in this matter. I do appreciate how irritating it is to have to deal with this sort of problem.

Customer: replied 2 years ago.

I have approached this through writing and have received a reply i.e. a breakdown and it is obvious that the revenue are charging interest from the year in question. What I want to know is even though the revenue had this money, obviously not in the correct account, do we have a valid case to pursue a tribunal.

Expert:  bigduckontax replied 2 years ago.
If HMRC are correct in charging interest from the year in question. However, interest is only applicable until the date of payment. If, however, HMRC received their money within the time limits then no interest should have been levied.
Should either of these caveats have been breached and the Department refuse to budge then a tribunal hearing is an option.

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