Introduction to this document

Compensation claim letter

Chances are that sometime in your dealings with HMRC he will make an error or be responsible for a delay that costs you money. In these circumstances you can you claim compensation for this.

Making a complaint

Let’s say HMRC comes to call and later issues you with a VAT assessment. You feel that it’s wrong and obtain professional advice. The advisor agrees that the assessment is incorrect. The advisor asks for an internal review of the assessment. HMRC sees the error of its ways and withdraws the assessment in full.

However, HMRC’s computer starts sending you reminders to pay the (withdrawn) assessment. HMRC has got its wires crossed and the various sections involved are not communicating with each other. This is not a matter that can be appealed to a tax tribunal, so what can you do? Write to HMRC (contact the VAT helpline on 0300 200 3700 for the address) making a formal complaint of the way the matter has been handled.

Professional costs

If you have incurred professional costs in obtaining advice on how to handle a matter, or have got your accountant/tax advisor to deal with it for you, you can ask HMRC for an ex gratia payment to cover the costs. The local office can authorise payments of up to a certain amount without referring the matter to higher authority. They are usually quite good at making these local payments, mainly because it closes the matter before it is referred to the independent Adjudicator. However, if you do not take a hard line in these matters they can run on for months and cause considerable aggravation.

Use the Compensation Claim Letter to claim your professional and other costs back by writing to HMRC with a detailed breakdown of these, including time taken to prepare the claim.