No one is perfect, and that includes the team at HMRC. In fact, it’s inevitable that mistakes will be made from time to time. The important thing is how you deal with those mistakes when they happen.
In this blog post, we’ll take a look at what happens if HMRC makes a mistake on your tax return. We’ll also discuss your options for rectifying the situation.
So, if you’re feeling worried about your taxes this year, read on!
Will HMRC Make a Mistake?
The short answer is yes, from time to time HMRC do make mistakes. In most cases, these mistakes are relatively minor and can easily be rectified by the taxpayer. However, there are occasional cases where more serious errors are made.
The mistakes made by HMRC can be broadly split into two categories: errors in the tax calculation, and errors in the administration of the tax return.
Errors in Tax Calculation
As the name suggests, these are mistakes that relate to the actual calculation of your tax bill. This could be something as simple as an incorrect figure being entered into the system, or a more complex error such as incorrectly applying a tax relief.
Errors in Administration of Tax Return
These are errors made by HMRC in the administration of your tax return, rather than in the calculation of your tax bill. This could include errors such as failing to process a paper tax return on time, or incorrectly recording information that you have provided.
What can I do if HMRC makes a Mistake on my Tax Return?
If you spot an error on your tax return, the first thing you should do is contact HMRC to let them know. You can do this by phone, post or online.
Once you have notified HMRC of the error, they will investigate and let you know what needs to be done to rectify the situation. In most cases, this will simply involve amending your tax return. However, if the error is more serious, you may need to provide additional information or documents.
If you disagree with HMRC’s findings, you have the right to appeal their decision.
How to Dispute an HMRC Decision?
If you think that HMRC have made a mistake, you have the right to appeal their decision. You can do this by writing to HMRC and explaining why you believe their decision is incorrect.
If you’re not satisfied with HMRC’s response, you can escalate your appeal to the Tax Tribunal. The Tax Tribunal is an independent body that will review your case and make a final decision.
What if I don't Spot the Mistake?
If you don’t spot the mistake on your tax return, HMRC will eventually realise their error and send you a notice to let you know. This notice will include details of the mistake and how much extra tax you owe as a result.
If you’re unable to pay the additional tax bill, you should contact HMRC immediately to discuss your options. In some cases, HMRC may be willing to agree to a payment plan or offer other financial assistance.
What if I think HMRC have Made a Mistake, but I'm not Sure?
If you’re not sure whether or not HMRC have made a mistake, the best thing to do is get in touch with them and ask for clarification. HMRC have a dedicated team of advisors who will be able to help you understand their decision and why it has been made.
Consequences of an HMRC Mistake
If HMRC makes a mistake on your tax return, the consequences will depend on the severity of the error. In most cases, the mistake will simply result in you having to amend your tax return. However, if the error is more serious, you may end up owing additional tax.
If you don’t spot the mistake and HMRC eventually realise their error, you will be sent a notice telling you how much extra tax you owe. If you’re unable to pay the additional tax bill, you should contact HMRC immediately to discuss your options.
How to Avoid Mistakes on your Tax Return
To avoid mistakes on tax return, you can follow the steps mentioned below.
1. Check your Tax Return Carefully before you Submit it
This includes ensuring that all the information is correct and that you have included everything you need to. You need to pay special attention to your income and expenses, as these are the areas that are most likely to be incorrect.
2. Use the Correct Tax Code
As an employee, you are responsible for ensuring that the correct amount of PAYE tax is deducted from your salary.
To do this, it is vital to check that your employer uses the right tax code for you. Incorrect tax codes are one of the most common mistakes made on tax returns. Make sure you check your code and update it if necessary.
If you believe your tax code is inaccurate, please contact HMRC for a revised employer-issued tax code. This can be done by phone – 0300 200 3300 – or on-line .
3. Keep Accurate Records
Good record keeping is essential for ensuring that your tax return is accurate.
You should keep records of all your income and expenses, as well as any other relevant information. This will make it much easier to complete your tax return and reduce the risk of making mistakes.
4. Use a Reputable Tax Software
Using a reputable tax software will help to ensure that your tax return is completed correctly and that any mistakes are spotted before you submit it.
Some software you can use include TaxCalc; GoSimpleTax; Taxfiler, etc.
5. Get Help from a Professional
If you’re unsure about anything on your tax return, you can get help from a professional such as an accountant or tax advisor. They will be able to check your return and make sure that everything is correct.
Conclusion
If HMRC makes a mistake on your tax return, the consequences will depend on the severity of the error. In most cases, the mistake will simply result in you having to amend your tax return. However, if the error is more serious, you may end up owing additional tax ore getting a refund depending on the mistake.
If you don’t spot the mistake and HMRC eventually realise their error, you will be sent a notice telling you how much extra tax you owe or how much of a refund you are due. If you’re unable to pay the additional tax bill, you should contact HMRC immediately to discuss your options.
To avoid mistakes on your tax return, you can follow the steps mentioned above such as checking your tax return carefully before you submit it, using a reputable tax software and keeping good records. You can also get help from a professional if you’re unsure about anything on your tax return.
To learn more, get in touch with us today.
