HM Revenue and Customs

5. Mr H complains that HMRC’s consolatory payment of £2,675.62 is not sufficient redress to put him back in the position he would have been in were it not for HMRC’s misadvice.

6. He says that this consolatory payment enabled him to repurchase only 234 of the 304 shares that the Adjudicator’s Office agrees Mr H should be compensated for, which he originally sold based on HMRC’s misadvice, and did not include compensation for further dividends lost. This has left him 70 shares short of where he would have been had this mistake not occurred.

7. Mr H complains that HMRC’s reasons for refusing redress for financial loss of 304 shares at the first and second review stages were wrong and that HMRC did not follow its own guidance on redress.

8. He says as a result he has had to spend a great deal of time and effort progressing the complaint through successive stages. This has caused significant concern, disappointment and frustration with HMRC’s failings.

9. In line with HMRC’s Complaints and Remedy Guidance, Mr H would like HMRC to reimburse him a further £895.44 to enable him to buy the remaining 70 shares and compensate him for further lost dividends. He would also like HMRC to acknowledge its poor complaint handling and pay redress of £500.

10. HMRC spoke with Mr H by phone in October 2023. Mr H informed HMRC he wanted to pay the Inheritance Tax that was due via instalments. HMRC’s website indicated that the first due date was 29 February 2024. Mr H was unsure of how much he needed to pay to obtain the grant of probate prior to that date. HMRC advised that the full tax amount, including the first instalment, should be paid immediately to receive the grant of probate.

11. Following this advice, Mr H sold 304 shares from his late mother’s estate to meet what was presented as an immediate tax obligation.

12. The payment was not due until February 2024 meaning Mr H sold 304 shares more than he should have. HMRC acknowledged misadvising Mr H in both its own complaint process and the Adjudicator’s Office report.

13. Following the Adjudicator’s Office (the Adjudicator) report, both HMRC and the Adjudicator’s Office (the Adjudicator) agreed that HMRC erroneously told Mr H he needed to make an Inheritance Tax payment in October 2023 rather than February 2024. As a result of this, Mr H sold 1570 shares in Scottish Mortgage Investment Trust (SMIT) to make the payment following that advice. In February 2024, due to an appreciation in the value of the shares he would only have had to sell 1266 shares to make the payment. This meant he ultimately sold 304 shares more than he otherwise would have.

14. The Adjudicator recommended HMRC reimburse Mr H £2,584 for this financial loss. As HMRC agreed it had misadvised Mr H and that he had been impacted financially as a result of that misadvice, it made a payment for the equivalent value of 304 shares at £8.50 per share due to its error – this was the share’s value in February 2024 when he would have otherwise sold them. By the time this payment was made, due to changes in the market Mr H could only repurchase 234 of the 304 shares he had initially sold.

Consolatory offer

17. Mr H complains that HMRC’s consolatory payment of £2,675.62 is not sufficient redress to put him back in the position he would have been in were it not for HMRC’s misadvice. Mr H complains that when he received HMRC’s payment in September 2025 he was only able to purchase 234 shares in SMIT and thereby lost 70 shares.

18. HMRC’s position is that the offer is appropriate. It maintains that beyond February 2024 (the date which Mr H’s financial loss ceased being hypothetical and became measurable) Mr H’s loss became speculative owing to market fluctuations. It argued that to reimburse him from a calculation date beyond February 2024 would have been to place him in a more favourable position and allowing him to benefit from subsequent market increases without having borne the associated risk.

19. As HMRC We have focused on whether the consolatory offer made by HMRC is sufficient.

20. How HMRC deals with complaints and considers financial loss is set out within the Guidance. This states that HMRC’s complaints policy is to ensure that customers are not left ‘out of pocket’ as a direct result of a HMRC mistake. Where there is a financial loss being claimed, CRG5125 states that the customer will need to show a clear causal link between HMRC’s mistakes and that loss. It also states that HMRC does not compensate for hypothetical, notional, speculative or potential loss. Only the net amount of actual financial loss, which can be demonstrated, evidenced and quantified, may be reimbursed.

21. Our Principles state that organisations should try to offer a remedy that returns the complainant to the position they otherwise would have been in had the maladministration not occurred. It also states that we expect organisations to apply an appropriate interest rate to payments for financial loss, again aimed at restoring complainants to the position they would have been in if the maladministration or poor service had not occurred.

22. When we consider direct financial loss because of maladministration this should be a quantifiable figure. Here the claim is for financial loss for the value of shares. This would therefore suggest it is necessary to determine the most appropriate date to ascertain the value of the shares before calculating a consolatory offer.

23. In our view, this is the date the shares would have been sold in February 2024 to make the Inheritance Tax payment. At that point, Mr H’s financial loss was not speculative. It was clear that he was £2,584 worse off (the value of the share shortfall) at the point he should have made the inheritance tax payment as opposed to when he did.

24. Beyond February 2024, there is an element of speculation due to the nature of the stock market. In Mr H’s case, the value of the shares increased so we can appreciate his position that the consolatory offer should continue to increase until HMRC issued the payment. Had the shares decreased to below what they were worth in the February, it may be unlikely Mr H would have been happy to accept less.

25. We agree with HMRC’s view that to recognise the increase in share price after February 2024 would not have borne the risk of the value of the shares decreasing and would have put Mr H in a more favourable position than he would otherwise have been. This would no longer be direct financial loss but a speculative loss. We appreciate this will be disappointing for him. We consider that it has acted in line with both the Guidance and our Principles, and there is no indication anything went seriously wrong.

Complaint handling

26. Mr H complains that HMRC’s reasons for initially refusing redress for financial loss of 304 shares at the first and second review stages were wrong. He says HMRC did not follow its own guidance on redress as a result for the emotional impact he experienced and time he spent pursuing the matter.

27. In respect of this aspect of Mr H’s complaint, the relevant area of the Guidance to consider relates to the emotional impact he says he has experienced.

28. Following the Adjudicator’s Office involvement, HMRC agreed to make a consolatory payment of £100 for the worry and distress caused.

29. Section CRG6000 of the Guidance breaks down consolatory offers made for the emotional impact of mistakes and CRG6075 specifically sets out the parameters for any such payment. It explains that consolatory offers for worry and distress are intended to be a way of acknowledging the effect HMRC’s mistakes and delays have had on the customer but clarifies that these are not akin to damages and do not amount to admission of legal liability.

30. In terms of figures, it states that payments tend to range between £25 and £500. It does, however, explain that there is scope for lower or higher offers if the individual circumstances of the case warrants. CRG6100 states that HMRC does not reimburse or compensate people for the time they may have spent sorting out errors.

31. Our Principles state that organisations should provide clear guidance about the criteria they use. They also set out that consolatory offers should be appropriate to the circumstances of the complainant.

32. We agree that Mr H likely has had to spend a great deal of time and effort progressing the complaint through successive stages. This, in turn, may have caused significant concern, disappointment and frustration with HMRC’s failings. We do not doubt that this would have been a worrying, distressing, and frustrating time for him.

33. We know that the £100 figure is below what he had expected. We note this figure was never intended to compensate him directly for any financial loss. That was done under the separate reimbursement offer we have considered under the previous heading in this complaint. The £100 was intended to acknowledge that HMRC made errors which impacted you and, from what we have seen, this was in line with the parameters set out in the Guidance.

34. We appreciate that the figure is not what he wanted or one that he is happy with. While we recognise the frustration Mr H experienced, we find the £100 payment is in line with the Guidance and there are no indications anything went seriously wrong. Therefore, we will not consider this further.

1. We have carefully considered Mr H’s complaint and we have decided to take no further action.

2. Having reviewed the relevant evidence, we find that HMRC’s consolatory offer is appropriate and in line with guidance. We understand Mr H’s grounds for disagreeing with the offer and appreciate his perspective. We see HMRC has reimbursed him for evidenced financial loss rather and to have gone beyond this would have been speculative loss.

3. We also consider that HMRC’s £100 consolatory offer for poor complaint handling is appropriate. This figure was intended to acknowledge that HMRC had made errors and, from what we have seen, the consolatory offer to reflect this was in line with the parameters set out in the relevant guidance.

4. We understand this has been a difficult and frustrating experience for Mr H. We know his experience has and continues to be challenging as he believes HMRC’s actions have left him financially worse off. Our decision is in no way meant to detract from how significant these matters are to him.