HM Revenue & Customs (HMRC) shows its human face again. Or does it?
We used to act for a taxpayer until his death in 2007. His widow, who is aged 89 and in frail health, has never completed a tax return, nor has she ever had need to. However, she has recently received a letter from HMRC stating that they have set up a self-assessment record for her because:
“You contacted us to register for Self Assessment, or
Your circumstances mean that you need to complete a tax return.”
In view of our previous involvement with the family her son contacted us, and we contacted HMRC to enquire why as her circumstances had not changed since the death of her husband. We were told:
- It was due to the change in the taxation of interest, and
- When the letter was issued it was necessary to register individuals receiving in excess of £2,500 interest in the year, but
- That level had since been increased to £10,000 interest, but
- As we were not registered as agent they could not act on our word alone but that the taxpayer would need to contact them.
We therefore advised her son, who has Power of Attorney, to contact HMRC directly. He telephoned them, but they refused to act on his word without having sight of a certified copy of the Power of Attorney.
It is clear from the letter received from HMRC and the subsequent phone calls that:
- As the taxpayer did not contact HMRC then they must have some knowledge
- That knowledge extends to knowing that she is receiving in excess of £2,500 interest per annum
It would also seem reasonable that to presume that, as they are not registering everyone with an open bank or building society deposit account, their knowledge extends to knowing the amount of that interest and, therefore, that she is not receiving more than £10,000. In fact, the future plans already announced by HMRC make it very clear that they already know exactly how much interest this individual, and everyone else, has received.
Our question is simply this. Why is HMRC continuing to subject their “customer”, an old aged pensioner, to this worry, uncertainty and additional expense when they are fully aware that it is completely unnecessary?