Taxman penalises someone for paying too much tax!

"A spokesman for HMRC said ... "no one would ever be fined for "making an honest mistake"."

Utter tosh. The phrase "honest mistake" appears nowhere in the rules.

Instead, HMRC refers to "careless" which they define as "a failure to take reasonable care". So what is "careless" and what is "reasonable care"?

... and this is where it gets laughable, were it not so serious ...

In deciding whether someone has taken "reasonable care", HMRC takes account of the tax payer's "abilities and circumstances". Fair enough, you might think.

However, in also deciding whether the tax payer has "failed to take reasonable care", HMRC ignores "abilities and circumstances". Instead, HMRC asks what a "prudent and reasonable person would have done". (Can this possibly be the same notion of "prudence" which Gordon banged on about...?)

So there you have it. Crap legislation and, with the ink barely dry, HMRC is already lying about it.

When you ask for a rebate let the revenue do the calculations.

There is no penalty for getting the form in on time, but calculating the amount late, if there is no money actually due.

Having said that, it does seem like the guy was treated unduly harshly and is unlikely to be upheld if he appeals (but I bet he doesn't know the process, or even that it is allowed)

tim

Of course we don't know whether he wrote in and asked for a specific rebate amount, or simply completed his SATR which happened to contain wrong figures, and thus computed the wrong rebate.

Either way, there is a "potential loss of revenue" (PLR in HMRC-speak)

But interestingly the article (and other press reports on the same case) claims that nearly 3m people claimed rebates - "nearly a third of all SA taxpayers". HMRC really should clarify this - it implies the 3m were all SA people, but I suspect they're including loads of pensioners and others who are outside SA, so just write in or submit R40s.

Surely nobody is actually 'outside' SA. We're all subject to it regardless of whether we are obliged to file a return.

HMRC says "Self Assessment involves completing an online or paper tax return" - but I know what you mean.

Playing devil's advocate here, but perhaps that *is* correct. Perhaps the people who say things like "Under Self Assessment, you are responsible for notifying the Revenue if you have underpaid tax" are the ones who are being inaccurate.

I mean, I assume that, before the Self Assessment era, it wasn't exactly legit to keep schtum about ones liabilities!