HMRC earning money for nothing

[MEgirl]

My husband died a couple of years ago and it has taken up until now to finalise affairs for various reasons.

I was putting together information for my accountant and then heard that the filing deadline had been extended until the end of February. All the information was collated and the tax return was filed on time according to the new deadline.

I received a letter from HMRC to let me know that I had to pay interest and it turns out that the payment deadline wasn't extended despite the filing deadline being moved.

I've just spoken to my accountant who told me that many of their clients were caught by this, some owing thousands in interest.

How on earth can someone, paying for the first time, be expected to know how much to pay if they haven't received the calculation from their accountant? And then be penalised because it was paid late despite thinking that it had been paid on time.

My understanding was that it was no penalty for a late payment, but still interest... I didn't read too much into it though, just made sure I paid in January.
Your accountant should have better advised you.

This was explained on the gov website.

Your accountant should have advised their many clients about this.

@SunnydayeverythingsAOK

My understanding was that it was no penalty for a late payment, but still interest... I didn't read too much into it though, just made sure I paid in January. Your accountant should have better advised you.

Unfotunately, I couldn't have paid in January as the calculation wasn't done until late February.

Lesson learnt. I'm learning as i go having never had to deal with finances like this in the past.

And yes, I'll have to take it up with the accountant.

Your accountant should have given you an estimate in January to pay, which could then have been finalised in February with the aim that any interest should be minimal.

I would take it up with them if they didn't advise late payment interest would be due. They may offer to pay towards it as a gesture of goodwill.

Yes, your accountant is the one who's slipped up here. It's very normal to pay an estimate if the calculation hasn't been finalised.

Unfortunately, as this was the first time that I dealt with this accountant and there were probate issues to deal with they couldn't have had any idea until I provided all of the information. Had they told me that the payment deadline hadn't been extended I would have got the information to them sooner. I will definitely be taking it up with them.

The interest payment is under £100 but could easily have been much more. This definitly won't happen again on my part.

I am the complaints partner for a major form of accountants, if they did not tell you that the tax had to be paid by 31/1 then complain and ask them to cover the interest, I regularly cover the interest for clients if it is our fault,

Thanks AuditAngel. I will definitely be taking it up with them and ask them to cover the interest.

One query - did you bring the records in before the original January deadline? Was it possible to determine an estimate?

I'm surprised any accountant had a lot caught out and by thousands! The interest rate isn't terribly high.

I had one client caught. Records didn't come in until February and an estimate wasn't possible even then because they were a mess.

It's not good to have a lot of clients in this position.

Call hmrc. If this is your first late payment they will most likely wave it. Will be easier than the conversation with your accountant.

You need to realise that if every client left things to the deadline we would be in a world of trouble snd, you've openly admitted you'd have done it earlier if you had known - so it must have been possible.

Many engagement letters require records within a certain timeframe, so look at the terms in your letter.

They won't waive interest.

Penalties etc they may, on appeal.

Also make sure its paid now, if you haven't. There's a surcharge at end of March too!

Thanks for the information Kezzie. It's a bit of a long story. The short version is that the original probate accountant would only communicate via the probate lawyer and I was finding it rather difficult. They weren't instructed to act on my own personal accounts only the estate so wouldn't give me an estimate. I moved to a new recommeded accountant who finalised both the estate accounts and my personal account.

I have never had the need to deal with accountants in the past so wasn't anticipating this. I was struggling to get the information together so when I heard about the deadline moving after consulting with them I took a little longer to do my bit.

Anyway, the interest isn't much but I will still discuss it with them. The junior as offered to write to HMRC on my behalf and see whether they will waive it though it sounds from your experience as though they won't.

I still have a lot to learn about all of this. One step at a time as they say.

@Kezzie200

One query - did you bring the records in before the original January deadline? Was it possible to determine an estimate?

I'm surprised any accountant had a lot caught out and by thousands! The interest rate isn't terribly high.

I had one client caught. Records didn't come in until February and an estimate wasn't possible even then because they were a mess.

It's not good to have a lot of clients in this position.

There was no way to determine an estimate originally because the accountant didn't have the figures. There were some issues related to whether specific items should have gone in to the estate accounts or my personal account and until I gave them the figures and dates when I received various monies, there was no way they could have worked out any calculations.

I'm on top of giving them all of the information early for next year and after that I'm hoping to be able to do the returns myself.