Saturday, 31 January 2009

Is the Labour government that short of money

The Mail reports that:
"Millions of self-employed workers could end up paying tax which is not yet due because of a glitch in the HM Revenue & Customs website.

Those filling in an online return are being asked to pay their tax for the last financial year - and make a contribution towards the amount due for this year.

However, although the back tax must be paid by midnight today, half of the so-called 'payment on account' is not due until July.

But HMRC has not publicised the website error because they fear it could cause chaos so near to the annual deadline.

And while it charges an interest rate of three per cent to those who owe it money, it will not pay out any interest on cash which is handed over too early.

More than nine million people will fill in self-assessment forms this year, and two out of every three do so online. Many of those will wait until the last moment to complete their forms.

This means they rely on the Revenue website to calculate the final figure they need to pay by tonight's deadline.

The current problem affects self-employed taxpayers who have a bill of more than £2,000.

These people are asked by the Revenue to contribute towards next year's bill as well as pay their tax for the previous year.

Although half of the 'payment on account' is due today, the other half is not due for another six months.

Despite this, the Revenue website is asking for the full amount.

As a result, many self-employed workers will automatically assume they must pay this amount now. "

Is the Labour government that short of money that the HMRC have to make mistakes and not correct them in time in order to bring forward tax revenues?

Here comes the disingenuous get out:
"A spokesman for the Revenue said: 'Nobody will pay more tax than they need to.

'This issue only affects those customers who make payments on account but we are taking it very seriously and apologise for any inconvenience caused.'"

True they will not pay more tax, but they will pay tax six months early; good cashflow for the Treasury, not so good for the poor taxpayer who pays early due to a HMRC mistake.

Will anyone at the HMRC pay the price for this mistake? In the private sector a mistake like this on such an important website would mean the loss of a job or the IT contract, but in the public sector I presume the only outcome will be a new contract to fix the problem. As Private Eye like to say.... "trebles all round".

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