Payment on Account issues caused by HMRC

A glitch in HMRC’s computer system means it has not sent out payment on account reminders for January Payments on Account, and the problem won’t be fixed before the 31st July payments become due.

HMRC has confirmed that they’re aware of the issue, and that affected taxpayers will not incur interest costs as a result. Whilst HMRC consider this is only affecting a small number of taxpayers, it appears to be more of a widespread problem.

The professional tax and accountants bodies have complained to HMRC, who have apologised. They have not contacted affected taxpayers to warn them what to do though.

What taxpayers should do

If we prepare your tax return, we will always let you know at that point what needs to be paid and when. We also send reminders in June of the amounts to be paid by the 31st July.

However, HMRC have warned that any Payment on Account made at this point may well be immediately refunded!

If this happens to you, we would advise you to put the payment on account into a separate bank account, and keep it until January 2020. HMRC have confirmed that there will be no interest charges levied, as long as full payment of all the tax due for 2018/19 is made by 31 January 2020. We would advise you though to keep ALL correspondence and details relating to the amounts paid and refunded.

If you have any questions about your payments on account or refunds received from HMRC, please do get in touch. If we’ve told you that an amount should be paid, please make sure that you refer to us if it unexpectedly comes back from HMRC.

Finally, if a payment on account amount does come back from HMRC, please don’t spend it before checking with us!