Businesses have been unable to pay tens of millions of pounds in VAT and corporation tax since February, as HM Revenue & Customs (HMRC) changed its bank details without telling them and failed to supply alternative details.
HMRC changed its bank account details for firms that pay tax using an International Bank Account Number (IBAN), a method mainly used by overseas businesses but also by some domestic firms, which were told last year that they would be notified, but many were not. Meanwhile, even though there was some advance notice in a couple of HMRC publications, they did not include the vital IBAN number businesses need to make payments.
In fact, some firms that did receive letters telling them about the change but many said they were so amateurish they assumed they were bogus. One firm discarded the letter advising them to make payment to a new bank account as they assumed it was a scam due to its poor wording.
Critics claim that the discovery flies in the face of HMRC’s public claims that it is successfully closing the UK’s tax gap, and believes that the missing taxes are likely to be the “tip of an iceberg” that could leave a huge hole in the Government’s coffers.
A spokesperson for HMRC said that the move to a new bank would be “invisible to most customers”, who should not need to do anything different when sending a payment to the taxman. However, customers paying from overseas will need to update their payment details.
The spokesperson added that anyone experiencing difficulties in making payments should contact HMRC immediately. Unfortunately, anyone missing payments could be liable for late penalty charges.