|
Stephen Ellis from Sheffield understood from the Revenue that he was receiving the correct amount and quite naturally spent the money. Eight months later he was told that he’d been overpaid by more than £2,000 and was summoned to court. Ellis disputed the basis upon which the overpayment was calculated and so decided to attend court to explain.
He was stopped by an apologetic judge who informed him that once the Revenue had the appropriate certificate of debt, there was nothing he could do except award judgement in its favour. “If the Revenue says you owe it money, then you do, no matter what the actual facts are,” says Ellis. “They are beyond the law. If you do not win your internal Revenue appeal, there is nothing you can do. The court stuff is a cover.”
It is true that tax payers can appeal Revenue assessments and decisions; there are internal procedures set out in codes of practice. However, the amount of compensation is at the sole discretion of the Revenue. Undoubtedly many disputes are resolved this way. Those that are not can go to an independent adjudicator and in some cases even to the Parliamentary Ombudsman. But even the latter cannot make an award of damages—it can only recommend what should happen. Normally these adjudications are followed, but not always; the Parliamentary Ombudsman actually found in Neil Martin’s favour. Compare this with a finding against an NHS Trust by the Health Service Ombudsman. That would provide powerful ammunition for a claim in damages against that Trust. The Revenue and an NHS Trust are both public authorities, but only one, it seems, can be sued.
At the time of writing Neil Martin’s case is being appealed and it will be interesting to see if the Court of Appeal dares question the Revenue’s immunity from civil action for damages.
It will no doubt have in mind that in an organisation as vast as the Revenue lapses are inevitable and can have appalling consequences. Sarah Wilcox (not her real name) was issued with a tax bill for £3,000 in 1993/4—but with no explanation of how the figure was arrived at. She paid £2,000 but disputed £1,000. However, as she was corresponding with the wrong part of the Revenue, enforcement followed and she was made bankrupt. The involvement of insolvency practitioners saw her debts mount to more than £250,000. She lost everything—including a house worth £500,000—and is now living in a hostel for the homeless.
Eventually Wilcox had the bankruptcy annulled on grounds of unfairness, which would have been a good argument against the original charges—except that the Revenue refuses to consider any case after seven years and this time had passed. In fact, things look set to get worse. The Government’s recent Finance Bill includes major changes in the penalty regimen for tax payers—in general, it will make it easier for the Revenue to charge penalties and also to charge larger penalties where tax payers make mistakes on their tax returns.
You can even be fined if you receive an assessment or a tax repayment that is wrong and the Revenue thinks that you should have spotted its error. There are few organisations of any kind, let alone public authorities, who are able to say to the layman, “You are responsible for your mistakes and for correcting ours.”
“With the Revenue you are guilty until you can prove yourself to be innocent,” says accountant Jeff Gitter, who, as a senior partner at the firm Lubbock Fine, deals with the Revenue daily. “And proving your innocence can be expensive and very difficult. It is simply unfair.” Clive Coleman is a barrister and the presenter of Law in Action on BBC Radio 4. Back to Magazine Articles
|
