Fergus responds

From http://ianrstewart.blogspot.com/

Following up yesterday's comment about my tax rebate, it's now on the BBC web site - http://www.bbc.co.uk/news/uk-scotland-11437602. It's framed as a question and answer, but, in actual fact, realising I was a C.A., Fergus asked my advice on the matter!

Here's the narrative on the web site in full:

Q. I was watching your spot on television after the lunchtime news yesterday and I thought I would let you know about another error HMRC made in my favour. I was sent my Self Assessment - Tax Calculation letter last week, showing that I was due a substantial refund. I knew this was incorrect, but hadn't had a chance to check it out properly before the refund actually appeared in my bank account this week. I have two employers, and pay and tax details for both were submitted in my tax return, but they have completely ignored one of them (the larger) and I have therefore benefited by having the whole of my personal allowance applied against the lower of my salaries, plus the benefit of a lower rate of tax being applied. Ian Stewart

A. This letter raises an interesting point - what do you do if the Revenue makes a mistake, that you know is a mistake? It's one thing if they send you some money that you know you are entitled to, another if they send you money that you think you might be entitled to but how should you behave when the Revenue sends you a cheque that you know that you have absolutely no right to have in the first place?

Well the simple answer is that you should behave in the way you would expect someone to behave towards you - and in this case that means giving the money back. It's probably also true to say that there is no doubt that the Revenue would have noticed their mistake - even if it took a few years - and Ian would have had to give the money back then anyway, so better to be upfront and tell the revenue about their mistake - no matter how much it hurts!