Revenue under attack for chasing non-existent debts

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The Independent Online
THE INLAND Revenue has come under attack for attempts by its inspectors to pursue non-existent tax debts caused by an embarrassing failure of its new self-assessment system.

Accountants say Revenue inspectors are pursuing taxpayers for debts even though other officials are being prevailed upon to consider an appeal against these assessments.

In many cases, the appeals have been necessary because of Revenue blunders. The Revenue has admitted that hundreds of thousands of tax demands were so inaccurate that they showed debts as credits and vice versa.

According to the Association of Chartered Certified Accountants, taxpayers are still being pursued by inspectors who do not appear to have been informed that assessments are under appeal.

Chas Roy-Chowdrey, a spokesman for the association, said: "The whole thing is a dog's breakfast. They have been raising the assessment for people to pay when there is no liability. The mistakes are still ongoing even now."

The Revenue recently told tax agents that its computer system, designed by EDS, the US software giant, had confused credits with debits in more than a quarter of a million cases. Tax credits were given to people who owed tax while money was demanded from people who were due a rebate.

The accountants believe the true figure for inaccurate returns could be much higher, with as many as three million returns being subject to mistakes.

They also complain that tax demands have gone out for less than pounds 1, tax returns have been issued for one person by two different offices, and returns have not been issued when they should have been.