Paying HMRC – use the right reference number

I wanted to add that we make BACS payments to HMRC for VAT and CT payments.

We have always used the correct references that HMRC want to see but in the exchange of information through the banks the level of information passed on is limited.

We use Barclays, HMRC use Citibank and as part of the BACS processing rather than transfer the 'payment reference', all HMRC get to see is our 'supplier reference' that we use for them. They are then left with an amount paid from us but with no reference to allocate the payment off their suspense account. We have repeatedly asked Barclays to rectify this for years but to no avail as I'd imagine its fairly small fry for them!

When I explained this again to HMRC they said to ask our bank again or as a more extreme measure to change bank! As you can imagine this latter suggestion is not exactly realistic given the relatively small sums involved.

Wishful thinking maybe but is there any pressure HMRC/Treasury can exert on the banks?

HMRC could do a great deal to improve the way they show reference numbers on correspondence and the way they describe the references. The Unique Taxpayer Reference is not always called that and does not appear on all material from HMRC. When making payments HMRC want a taxpayer's reference with a "K" added - what is that all about? And it takes research to realise which reference they wanted - was it the Government Gateway number or the UTR, the instruction was just "reference". Malcolm Lambert asks for HMRC pressure on banks; what about ICAEW pressure on HMRC?

I have clients who also say that references get curtailed by banks which causes unnecessary reminder.  On the subject of bank account details, I find the following link the quickest and easiest to find the correct account.  I don't know why it's is not given greater prominence: http://www.hmrc.gov.uk/bankaccounts/index.htm   

A few years ago I advised a client how to pay his £30,000 tax bill by bank transfer.  Several weeks later he contacts me to say that despite the money having left his bank account he is being pestered by HMRC for non-payment.  I visit the HMRC website and find indeed no payment has been credited to his account.  I speak to the client.  I ask him what UTR he used.  He tells me.   It isn't his UTR!

First thought - Oh no.  I have given him the UTR of another client.
Second thought - Oh no.  I hope that other client hasn't requested a repayment.

I go to the HMRC website.  I do a search on the UTR and I find the UTR is MINE!  I check my own account.  My clients money is indeed there.

First thought - Oh joy.  The money is there and it can be easily be returned.
Second thought - Oh s***.  The client is going to think I tried to nick £30,000 from him.

With he help of HMRC I arranged a transfer to my clients SA account.

Happily the client saw the funny side of it.  And he is still a client. 

Phew.