Taxman penalises man for paying too much

A taxpayer who paid too much tax to HM Revenue & Customs has been fined £1,400 for making a mistake when he asked for a rebate.

The self-employed man from Kent, who has not been named, tried to reclaim £3,000 in overpaid tax for the year to April 2009, but Revenue & Customs calculated that he was owed £1,000 and fined him £1,400 for the error.

Under new penalty regulations, the Revenue can fine taxpayers up to 30 per cent of tax owed for careless mistakes and up to 100 per cent for errors that it believes were deliberate and "concealed" mistakes.



Lawyers said that this was the first time they had ever heard of someone being fined for a mistake on their request for a rebate.

The taxman fined this taxpayer 70 per cent of the £2,000 difference between the sum that he felt he was owed and the sum that HMRC calculated it would repay him. Phil Berwick, director of tax investigations at McGrigors, a law firm that represented the taxpayer, for no fee, after he was fined, said: “Calculating a rebate can be complicated and the taxpayer in question was unrepresented by an adviser, yet HMRC has refused to take any of this into consideration.

“We believe he made an honest mistake, so for HMRC to be fining him is outrageous. HMRC has charged this taxpayer with a higher penalty than someone committing a serious fraud under the old penalty regime.”