21.09.2004

The letter from the tax man may not be what it seems!

The Federation of small businesses (FSB) has written to UK chancellor Gordon Brown to demand a public apology from the Inland Revenue, after it sent letters to thousands of small businesses suggesting that their tax returns may be incorrect.

The FSB said it had asked the Chancellor to ensure that the Revenue sets the record straight, and had called for the Revenue to write to all recipients of the letter and apologise.

The federation said that the letters had caused a "wave of confusion and anxiety" among innocent business owners who assumed they were the opening shot of a full Revenue enquiry.

The Inland Revenue has insisted that the letters outlined common errors to enable taxpayers to complete future returns accurately.

The FSB said accountants had incurred additional costs and some clients had accused them of making mistakes. Advisers feared that they had "suffered a slight on their reputation."

FSB tax chairman Neil Hamper said: "The letters are a complete disgrace. They are vague and misleading. They suggest that a specific problem has been identified when in fact the letters have been generated by computer on the basis of standard triggers.
"The vast majority of tax payers that receive the letter will have filed their return correctly and paid the right amount of tax. It’s a case of let’s shake the tree and see what falls out."