Taxpayers fined despite filing on time

The Inland Revenue has admitted that it incorrectly issued late return penalty notices for 2002/03 self-assessment tax returns that had been filed on time.

'We now know that a number of these penalty notices were issued wrongly, and we want to apologise... for the inconvenience and additional work we know that these errors will mean. We have identified the cause as being individual processing errors, so we will be doing all we can to improve our procedures,' says the Revenue.

Kevin Walmsley, partner at accountancy firm Wilkins Kennedy, say such errors occur 'on a regular basis'.

'Our concern is that innocent taxpayers who don't have professional advisers will have paid this fine rather than confront the Inland Revenue,' he said. 'Taxpayers assume their return has got lost in the post and, therefore they are liable.'

A fine of £100 is payable if self-assessment forms are received after 31 January and this can be increased to£60 per day.

The Revenue will only pay back unnecessary penalties if the taxpayer asks for a refund, however it has agreed to consider compensation payments for any reasonable costs incurred as a result of its mistakes.

Walmsley says: 'It would be fairer if the Inland Revenue went through its files to identify those taxpayers that it owes money to, otherwise it will be keeping money it has gained only through its mistakes.'

Soggy message


The average Brit 'wastes' (the Prudential's choice of word) £1,725 per year on food, luxury items, entertainment, travel, gadgets and hobbies. According to its Soggy Lettuce report (so called because 61 per cent of households admit to throwing out slimy green remnants every week) we needlessly spend £80.6 billion a year on food that goes off before it can be eaten, on clothes and shoes that are never worn, and on club memberships that go unused. This is, apparently, enough to cover the government's expected expenditure this year on transport, defence, industry, agriculture, employment, housing and the environment, pay the annual council tax for every household in Britain four times over, and cover the current wages at all Premiership football clubs for the next 114 years.

Men are apparently the worst offenders, wasting on average £240 per year more than the average woman.

When asked how they felt about the amount of money wasted, 29 per cent of respondents said that it didn't bother them, 4 per cent said they could afford to waste it and 13 per cent admitted to getting pleasure out of a little waste. Only 16 per cent admitted to feeling guilty, 9 per cent resentful and stressed and 4 per cent felt powerless to stop.

So what should we do with this money instead of wasting it on clothes, shoes and yummy food? Please don't say we should be investing it in one of Prudential's with-profits bonds? Have these guys never experienced the joy of shopping?

Red letter date


Insurers who are issuing 'red letters' to their with-profits endowment policyholders must warn them of the date by which they must make a complaint about the sale of the policy. The red letters notify policyholders that their policy is at high risk of not paying out the target amount - usually the amount needed to pay off a mortgage - at the end of its term. Policyholders officially have three years to complain from the point of receiving their red letter if they think they were mis-sold their policy.

The Financial Services Authority has just ruled that insurers that want to enforce this time bar must make clear to policyholders that they have just three years in which to complain, and must issue a time-bar warning at least six months before the complaint period expires.

Anna Bradley of the FSA said : 'We are applying these measures straight away to ensure that consumers who believe they were mis-sold their endowment policies are clear about the date their right to complain runs out and to address concerns that some could unwittingly lose the opportunity to claim compensation.'

The Consumers' Association has welcomed the move but says: 'Our concern now is for those people who have been told by companies that they are out of time. We encourage these consumers to take their complaint to the Financial Services Ombudsman, who deals with these cases individually.'

For details on how to complain, visit the Consumer's Association website, www.endowmentaction.co.uk.