UK Inland Revenue Struggling To Cope With Backlog, Reports Suggest

by Robert Lee, Tax-News.com, London

03 December 2002

The beleaguered UK Inland Revenue service has been sending out penalty notices for late payment of national insurance contributions to companies whose tax affairs are completely up-to-date, according to several recent reports.

Writing to online accounting community, TaxZone.co.uk, many tax advisers reported that the Inland Revenue is mistakenly demanding fines of up to £800 at a time for alleged non-payment of NICs on employee benefits such as company cars and private medical insurance.

Speaking out on the issue over the weekend, Managing Director of TaxZone, Gary Mackley-Smith suggested that: 'The issue of incorrect penalty notices by the Revenue is another example of a department facing meltdown as it struggles with a massive backlog of post. It's already taking up to three months to process correspondence.'

This follows an admission from the tax authority last week that its backlog of paperwork has increased dramatically of recent times, and that it is struggling to keep up.

Speaking to The Times, a spokesman for the IR said that the tax authority was unaware of any widespread problem with the P11D (b) forms, but would be investigating the matter in order to ascertain if 'anything out of the ordinary was going on'.

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