David Ingall, partner, J.W. Pickles, Selby, Yorkshire [04 Apr 2000]

I quote from a letter recently issued by a local Revenue office following an Enquiry as to why a repayment had not been made to a client. I make no apology for quoting both paragraphs in full.

'I can agree with your comments regarding the credit that was held on your client's accounts before the balancing payment for 1998/99 became payable. I have checked your client's records and can confirm that the 1999 return was processed correctly, indicating that a refund was requested. On checking the records at this present time there is nothing recorded to suggest why this was not repaid on processing the return.

'The only possible explanation I can give at this present time is that if a repayment stop signal was set on your clients record at the time the return was processed, this would have prevented the repayment being made. As this signal is not recorded on record now, I have no way of checking that this was the case. There are no records to suggest this did happen, but this is the only explanation I can give.'

The politeness and helpfulness of the officer writing the letter I do not doubt for one moment. However, there are two disturbing elements to the letter.

Firstly the Revenue has a system which for no reason, other than a maverick decision by an officer, which can prevent a proper tax repayment being made to a taxpayer. It is apparent that this can be improperly applied as is evidenced by the letter.

Following on from this, in direct contravention of the principles that apply to all accounting systems (that are worth their salt anyway) there is apparently no audit trail. This means there can be no check whether a bar has been improperly applied. Who is going to be the first to take the Revenue to court on an issue such as this?

But the greatest contradiction of all is that the Revenue have failed to keep proper accounting records!! There is no penalty, no imposition upon the Revenue for this failure. Just like those penalty notices incorrectly issued, or the failure to take note of a ticked box on the Return there is no recompense for the taxpayer for the struggle to get things corrected.

But if the boot is on the other foot, if a taxpayer is wrong or careless or simply misunderstands forms that the professionals struggle with, then the whole self righteous weight of the Revenue winds itself into action. And if you have failed to keep proper accounting records or there is no audit trail then those are major sins worthy of a specially designed penalty. ?To protect the Revenue?. But who protects the Taxpayer?