Any accountants out there to advise please?

[Thingstodotwo]

I’d be grateful for some advice please.
I’ve used the same local accountant for a few years. Small town practice. They filled my tax return as normal last year 24/25 and I paid the tax due. However when I filed this year HMRC flagged a £1k penalty due to unpaid “tax on account”. I’m PAYE but I did have some inheritance (investment shares so had to pay tax on these) last year. I’ve never paid tax on account before so it wasn’t on my radar. Accountant says they “didn’t realise” I should have done this as less than 80% of my total tax had already been collected at source. They asked if they should write to HMRC (to see if this penalty can be waived - the inheritance was a one off obviously! I suspect I know the response!) but is this wasting time while penalty goes up? Was this mess up on the part of the accountant? Or my fault for not checking? I go to them for professional advice and this rule seems like one they should know? Many thanks in advance.

Is the penalty £1k or the tax, interest and penalty due £1k? As an accountant someone going into payments on account isn’t a difficult concept, if they didn’t advise you to make the payment then they should be covering any interest or penalty and they can appeal it on their own time and cost. Would be very surprised if HMRC accepted that appeal though!

I would suggest you get your 25/26 tax return done before 31 July when the next payment on account is due so you make sure you’re paying the right amount as your accountant doesn’t seem to be doing that

Thank you this is helpful. I have JUST received a first letter about this from HMRC. It says the £1k is just interest (it doesn’t actually ask for payment of the funds on account!). It warns that interest will continue to accrue until paid but that interest is £0! This is bizarre!!

What has your accountant said about it? Have you had a look on your government gateway account? Sometimes that is easier to look at than the letters they send

Are you expecting to have any taxable income outside of PAYE income this year? It may be that no payment on account is due, but don’t just assume you don’t - it needs confirming and for HMRC to agree.

Whatever the situation is, the accountant should deal with it for free. I would expect them to calculate what’s due, appeal penalties and pay any interest arising from their mistake plus any remaining penalties themself, leaving you no worse off than if you had paid the correct payment on account.

If they’re not being cooperative, follow the complaints procedure in their engagement letter, which normally ends in complaining to their professional body if you’re still not happy.