HM Revenue and Customs

3. Mr A complains HMRC gave him incorrect information during a telephone call on 1 June 2015 and, because of this, he spent around £8,000 on accountancy fees. Mr A says if HMRC had not given him incorrect information, he would not have had these costs.

4. Mr A would like HMRC to reimburse the £8,000.

5. HMRC’s counter avoidance team discovered Mr A was a participant in a tax avoidance scheme. This resulted in HMRC issuing enquiry notices for the tax years 2005 to 2006, 2006 to 2007, and 2007 to 2008. Mr A says he never received any of these notices and the first he knew of HMRC’s action was when he got a notification letter on 22 April 2015.

6. HMRC can look into a personal tax return if it sends a ‘notice of enquiry’ to the taxpayer. Any notice may be served by post.

7. After getting the 22 April 2015 notice, Mr A called the HMRC accelerated payments team on 1 June 2015. Mr A says he told the adviser he never received any enquiry notices and he says the operator confirmed no notices had been sent to him.

8. Mr A employed a financial adviser with the intention of challenging the accelerated payment notices on the grounds that no enquiry notices had been sent to him.

9. When HMRC started to investigate the issues Mr A’s financial adviser raised, it was able to produce evidence of the notices being properly issued. Mr A then felt he had no option but to accept this was the case and agreed to pay the tax HMRC said was due.

10. Mr A then complained HMRC misadvised him in the telephone call on 1 June 2015. Mr A says if the adviser had not told him this, he would have never employed a financial adviser to represent him.

11. HMRC issued its first-tier response on 3 October 2016. HMRC said the phone call in question only lasted two minutes and eleven seconds, so it could not have been detailed enough for Mr A to have got the incorrect information he says he was given. HMRC did not uphold Mr A’s complaint.

12. As Mr A was not happy with HMRC’s response, it was passed to stage two of the complaints process. HMRC sent its second-tier response on 8 December 2016. Mr A complained HMRC did not give him the benefit of the doubt and HMRC referred to the relevant part of its Complaints and Remedy Guidance.

13. In its second-tier response, HMRC said it could not say exactly what its adviser said during the call, but based on HMRC’s operational procedures it did not believe Mr A’s version of events could be possible. This was because the adviser on the call would not able to answer an enquiry of this nature and this type of query would have to be referred to its enquiry team.

14. HMRC also said that as the call was so short, even if the adviser had decided to deal with the call, two minutes and eleven seconds would not be enough time to find the information Mr A says the adviser gave him. HMRC again did not uphold Mr A’s complaint.

15. On 27 July 2017, Mr A submitted a complaint form to the Adjudicator’s Office (AO). The AO investigates complaints about HMRC when the complaint cannot be resolved by going through the HMRC complaints process. The AO issued its final decision to Mr A on 4 January 2018.

16. The AO did not uphold Mr A’s complaint. It stated there was no evidence that HMRC had misadvised Mr A and it also confirmed it had been Mr A’s own decision to spend money to employ an accountant. The AO said as the decision to employ an accountant is an individual decision, HMRC would not usually pay for these costs. It found no basis for paying the accountancy costs or any other redress.

17. Mr A complained to his MP in September 2022 and then came to us on 16 October.

20. The law that gives us our powers and responsibilities in carrying out our work (the Parliamentary Commissioner Act 1967) says a person needs to make their complaint to an MP within a year of becoming aware of the problem. We cannot consider complaints brought to an MP after one year of realising there is a problem, unless we can see there is a good reason to. We have discussed this with Mr A to understand the reasons why he could not have complained to us sooner. We have also considered the time HMRC and the AO took to respond to Mr A.

21. HMRC sent an advanced notification letter to Mr A on 22 April 2015. As Mr A says he did not get the initial enquiry notices, this would be the first time he became aware there was an issue with HMRC.

22. After Mr A got the advanced notification letter, he made a call to HMRC on 1 June 2015. Mr A’s representative (the accountant) then contacted HMRC by letter on 14 August to dispute the validity of the HMRC enquiries. HMRC replied to this on 31 August and confirmed the relevant notices had been issued correctly, enclosing copies. This means Mr A became aware on 31 August 2015 that he was unhappy with the content of the call that took place on 1 June 2015.

23. From the evidence available, we cannot identify the exact date Mr A complained to HMRC. But we can see HMRC issued its tier-one response to Mr A’s complaint on 3 October 2016. HMRC issued its tier-two response on 8 December. Mr A then approached the AO, who further investigated his complaint.

24. The AO issued its final report on 4 January 2018. The AO advised Mr A if he wished to take the matter further, he could ask his MP to refer his complaint to us.

25. Mr A raised his complaint with an MP in September 2022 and with us on 16 October 2022. This means his complaint is five years outside of our time limit.

26. We have taken into account the time it took Mr A to go through the HMRC and AO complaints process, which was completed by January 2018. As Mr A did not approach his MP until September 2022, this leaves a time gap of four years and eight months where the complaint was not progressed.

27. Mr A explained this delay was because he was so unhappy with the AO report that he did not think it was worth progressing any further. He says after he read the AO’s comments he gave up. Mr A confirmed he later decided to contact us because he had reason to contact the Financial Ombudsman about a different matter and it was able to help. This gave him some hope that we might achieve the outcomes he is looking for.

28. We spoke to Mr A to further examine the reasons for the delay. Mr A explained that he lost his job around the time he was going through the complaints process. He also had to arrange to pay his tax bill, which was more difficult as he was working for a limited company and his tax affairs were complicated. Mr A says he did not know there was a time limit to bring his complaint to us.

29. We appreciate that Mr A was disappointed with the outcome of the AO investigation. We should explain that disappointment alone is not a strong reason to put our limit to one side, especially for such a long period. The AO made Mr A aware that he could approach us as the next step, and we cannot see anything to suggest it was not reasonable to expect him to do this within our time limit. Information about our service and time limit is available to the public.

30. We also thought about Mr A’s circumstances and how losing his job and having complicated tax affairs may have affected his ability to come to us sooner. The fact he was able to deal with his tax affairs and make complaints to the Financial Ombudsman during this period shows us he would also have been able to contact his MP and then us. And, if he were struggling to find the time to handle his complaint, it was open to him to use free advocacy services like Citizens Advice.

31. With this in mind, we are not able to set aside our one-year time limit and we will not investigate the complaint further. We know this will be disappointing for Mr A, so we hope our explanation is clear.

1. The Parliamentary and Health Service Ombudsman has carefully considered Mr A’s complaint about HM Revenue and Customs (HMRC). We understand Mr A is frustrated as he believes HMRC gave him incorrect information and, because of this, he decided to pay an accountancy firm to act on his behalf. Mr A told us if he had not been given the incorrect information, he would have had no reason to get representation and pay for it.

2. Mr A’s complaint falls outside of our one-year time limit, and we have not seen any strong reasons to allow us to put our time limit one side and investigate the complaint. We explain the reasons for our decision below.