Belfast Telegraph

Thursday 17 April 2014

Taxman flouted human rights in pursuit of revenue

Revenue and Customs has admitted it breached the Human Rights Act by trying to collect penalties from taxpayers - after they had died.

Now the representatives of around 200 deceased taxpayers, 15 of them in Northern Ireland, have received apologies from HM Revenue and Customs.

It has also promised to repay the penalties, plus interest.

Revenue officials had imposed penalties on the estates of deceased taxpayers for outstanding or disputed tax liabilities, despite being advised it may be illegal, according to PriceWaterHouse Coopers.

David Hill, a Belfast-based tax investigations specialist with PWC, said the move was overdue:

"Ever since the Human Rights Act took effect, tax professionals have argued that the Revenue could not penalise the deceased to settle income tax liabilities that may have arisen - and been disputed - when they were alive.

"But HMRC claimed they were entitled to collect the penalties."

Mr Hill has urged HMRC to publicise its decision as he says people are not aware of the change.

"To err is human, and Revenue staff are only human and are working hard to correct their error.

"Despite this, the Revenue may have difficulty in identifying everyone who may be entitled to a refund, because their representative did not make a written submission.

"Some tax advisors wrote to HMRC asking that the Revenue refund the money if and when officials discovered they were wrong. Where advisors sent these side letters, it is repaying the penalties without any prompting - for which it should be applauded.

"But if no side letter was received, HMRC may have trouble identify the error and repay the penalties." He urged anyone who believed a deceased relative was penalised wrongly, and had not heard from HMRC, to act immediately.