Pub landlord facing £2.6million bill after missing decimal point on his tax return

By
Richard Hartley-parkinson

10:27 EST, 17 May 2012

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13:46 EST, 17 May 2012

You know that moment when you’ve offered to buy a large round of drinks and wait to find out how much it’s going to hit you in the pocket?

Well spare a thought for pub landlord Steve Wilson who after filing his tax online got quite a shock when he was faced with a £2.6million bill.

When he sent his VAT return for the King’s Head pub in Wells, Somerset, to HMRC, he quickly realised he’d failed to put in a decimal point.

Steve Wilson forgot to put a decimal point on his online tax return and faced a £2.6m bill as a result

Steve Wilson forgot to put a decimal point on his online tax return and faced a £2.6m bill as a result

He tried to log back into the revenue’s computer system, but the damage was done.

Mr Wilson tried contacting HMRC by phone, but this turned out to be more difficult than he had hoped.

He said: ‘After I’d managed to prise my palm from my forehead and mop up the blood I naturally called the VAT helpline.

‘I use the term helpline in its loosest possible sense; a bit like a tentacle from a Man o War Jellyfish would be a helpline if it were the only thing to grab while drowning.’

The taxman claimed that the mistake had been fixed and that the correct amount would come out of his account.

What had been a funny story for the King’s Head regulars then took a more worrying turn when Mr Wilson’s bank manager called.

He was told that HMRC had tried to take the money from his account, so once again he took to the phones, but was told by an automated message that he could not amend errors made online by phone.

Mr Wilson logged onto his internet banking account to find that the money had been withdrawn from his account

Mr Wilson logged onto his internet banking account to find that the money had been withdrawn from his account

Instead Steve would be required fill in a paper form and send it of to HMRC. It would take the tax officer 15 working days to process then they would get back to him.

However the earliest a VAT return can be submitted is three weeks before the direct debit is due to be paid. If there is an error it takes HMRC at least three weeks to fix it.

Once Mr Wilson got through to a person at HMRC he was told that it was not possible to cancel the direct debit from their end and that it was, in fact, him who should have cancelled the direct debit authorisation with his bank.

This left him facing the prospect of bank charges for a £2.6 million overdraft until HMRC could refund the difference.

Mr Wilson is now waiting to see what the HMRC’s next move will be.

A spokesman for HMRC said: ‘We apologise for any inconvenience caused.

‘Customers are always given the opportunity to check their online return figures before submission.

‘HMRC has robust security procedures in place to ensure that any information provided to us is genuine and correct, which can take a few days to confirm.  

‘As a direct debit is a private arrangement between the customer and their bank, the customer must request its cancellation. HMRC has no legal power to do this.’

Here’s what other readers have said. Why not add your thoughts,
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The comments below have been moderated in advance.

SJB, UK, 17/5/2012 20:00
I suspect you do have to call them everyday because of error like this!

I hate HMRC – I am sick of calling this useless establishment when they owe ME cash for overpayments – you are on hold for up to an hour and they take 6 weeks to respond to your mail. When they get it wrong you wait for ever and a day but guess what? You owe that useless shower money as they take it instantly!!!

I think you would notice if you were suddenly overdrawn to the tune of 2.5 million.
…..I didn’t. I just thought Mrs SoulSurvyvr had a good day on ebay.

His mistake, he suffers, so what is he whinging about? He should have called his bank and cancelled the direct debit. I cleared the balance on my credit card, asked the credit card company not to take the minimum payment as none was due, but they said they couldn’t as the request for the DD had already been sent. I phoned my bank and they cancelled the direct debit and today I got text notification from the bank that the direct debit had failed (ie the cancellation was successful). Now I will set up a new DD so that future payments are taken. Job done, no drama, no running to the press whinging and moaning.
Having said that, if the HM Customs Excise had made the mistake, they would have recovered any overpayment with interest pretty pronto.
His bank must be very understanding to have given him that massive overdraft facility. He is going to have a hefty interest charge from the bank at, say, 18% on £2.6M – over £1800 per day! Expensive primary school mistake.

It’s not just HMRC. I told the wages department last month, that my tax code was wrong because the personal allowance had gone up. They said they hadn’t received a new tax code but if I thought it was wrong I should contact HMRC.
So 30 minutes of listening to recorded music and messages saying check the website I finally got through to a real person. He agreed that I shouldn’t be on last years tax code. He couldn’t see how the wages department had got the week number wrong and had collected the wrong amount of tax.
Unfortunately, it looks like instead of getting a refund I might have to pay more tax. It is so important to check things thoroughly. Last month money was deducted from our pay because the wages dept had made a mistake they are not going to be popular when they have to do it this month.

The chances of him having to pay £2.6m were precisely nil.. Next!

The dude should just go to the bank and fill in an indemnity claim. Money and charges refunded and then hmrc can take as much time as they like to sort out the error.

I’ve had the same!!!!! My EMPLOYER put in the cost of my car and not the benefit and I got a letter from this tax lot threatening the bailiffs If I didn’t send them £20,000!!!!!! It was relentless and horrible and the folk I phoned at the tax office were downright arrogant and rude.

-I’m an accountant and have to call hmrc everyday they are actually very helpful with errors like this I have had no problem. All about publicity nowadays
-I’m an accountant and have to call hmrc everyday they are actually very helpful with errors like this I have had no problem. All about publicity nowadays
– I’m an accountant and have to call hmrc everyday they are actually very helpful with errors like this I have had no problem. All about publicity nowadays
~We get you’re an accountant, you fouled it up AND put it in triplicate!~

Surely his bank won’t allow that payment to be debited out. Banks always have an upper limit. The worst that could happen is he could incur bank charges for unpaid or returned direct debit!

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