3. Mr A complains that HMRC failed to provide sufficient financial remedy to address the impacts on him of its delays and mistakes in handling his tax affairs.
4. Mr A told us he experienced stress, worry, concerns about bankruptcy and that his work and concentration were affected.
5. Mr A would like HMRC to add to the remedy already provided.
6. In July 2020, HMRC asked Mr A to complete a Self-Assessment tax return. HMRC thought at that time that he might be avoiding paying the correct tax through a ‘disguised remuneration’ (DR) tax avoidance scheme.
7. Mr A contacted HMRC by phone in September 2020 and told it he had never received any DR. At the beginning of March 2021, HMRC wrote to Mr A to say that it was looking at his possible involvement in a DR scheme. It then looked at his 2018/19 (and later also his 2017/18) tax return and concluded he was indeed part of a tax avoidance scheme in that year. It went on to request he pay additional tax in late February 2023.
8. Mr A wrote an email to HMRC in March 2023 and contested its findings that he had been part of a scheme. He wrote again at the end of November 2023 expressing his disappointment at the decision and HMRC’s failure to contact him after his March 2023 email.
9. HMRC replied at the beginning of December 2023 and explained why it had checked his tax records and explained the appeal process. Mr A’s representative wrote to HMRC in January 2024 and appealed the assessment on Mr A’s behalf. He wrote again in early April 2024 to complain that he had not had a response, and the delays were causing his client significant stress.
10. HMRC wrote to the representative at the end of April 2024, and further communications took place in May 2024. The representative provided HMRC with evidence of Mr A’s income and HMRC amended the tax assessment for 2017/18 and showed no additional tax was payable for 2018/19.
11. HMRC responded to the complaint at the end of May 2024, apologised for delays and offered a financial remedy of £100. Mr A was dissatisfied with the remedy offered and asked for the complaint to be considered at the second tier of the complaint process. The response from the first tier was upheld at the second-tier review and Mr A was directed to the Adjudicator’s Office (AO) if he wished to pursue his complaint further.
12. He did so in August 2024, and the AO provided its investigation report towards the end of March 2025. It did not uphold Mr A’s complaint and directed him to our Office if he remained dissatisfied.
13. Mr A brought his complaint to our Office in June 2025.
The handling of Mr A’s tax affairs
14. In March 2021, HMRC informed Mr A his previous employer might have been involved in a tax avoidance scheme and advised him to seek independent advice. In 2023, while reviewing Mr A’s tax returns for 2018/19 and 2019/20, HMRC found discrepancies due to an error by Mr A in reporting figures. Although HMRC corrected the 2019/20 error within the allowed 12-month timeframe, it missed identifying the 2018/19 error, which it acknowledged as an error on its part.
15. Mr A attempted to appeal HMRC’s decision in March 2023, claiming he had sent an email, which HMRC says it did not receive. Mr A’s accountant formally appealed in January 2024, but HMRC was slow to respond, finally addressing the appeal in April 2024 after a complaint was lodged. This was identified as an unnecessary delay by HMRC.
16. We will now consider the impact on Mr A and whether that has been remedied by HMRC.
The impact and remedy
17. Mr A said that being told he owed HMRC over £30,000 and had a month to pay was extremely worrying and distressing and that he worried he might go bankrupt. He also told us that even when his accountant got involved it seemed like he was being ignored, and Mr A was convinced HMRC had made its mind up about getting him to pay the money.
18. We can appreciate this must have been a difficult time for Mr A and are sorry to hear about the stress and worry he experienced.
19. We have seen HMRC accepted it had made an error in how it handled Mr A’s tax affairs and accepted there was an unnecessary the delay in how it handled his appeal.
20. When HMRC considers a financial remedy it does so in line with its Complaints and Remedy Guidance (the CRG). It says in that guidance that ‘If the impact of our actions have affected a customer, causing them worry or distress, in some cases we may be able to make a payment to acknowledge this and apologise.’
21. In Section ‘CRG6125 - Payments for worry and distress: Unreasonable delay’ it says ‘Sometimes our unreasonable delays can cause worry and distress to our customers’.
22. In Section CRG6075 – ‘Payments for worry and distress: How much to pay?’ it says:
‘Our payments for worry and distress are meant to be a token - a way of acknowledging that our mistakes and delays have affected someone badly. They are not akin to damages and payment does not, in any way, amount to an admission of any legal liability. The payments will usually range between £25 and £500, but experience shows that the vast majority of payments are at the lower end of this range’.
23. HMRC offered Mr A a financial redress of £100 and apologised for the impact on him of its error and the delays. This is in line with its guidance.
24. We do acknowledge the frustration and distress Mr A felt when he was told his tax affairs were not in order and that he had underpaid a significant amount of tax. These impacts were amplified when HMRC delayed in responding to his appeal. We find HMRC’s actions to put this right for Mr A are in line with the redress guidance. Therefore, there are no indications anything went wrong, and we will take no further action.
1. We have carefully considered Mr A’s complaint about HM Revenue and Customs (HMRC). We are sorry to hear of the difficulties he has experienced in relation to his tax affairs. We can see from the information he has shared with us that these matters have caused him frustration and distress, and we are sorry to hear that is the case.
2. We have considered the evidence available to us and can see that HMRC has offered a financial remedy and apology to address the impact of the errors it identified. This is in line with its guidance on putting things right and means we will take no further action.