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Taxman penalises small businessman for overpayment of tax

In a bizarre development it has been revealed that HM Revenue and Customs recently fined a small businessman in the UK after he attempted to reclaim £3,000 in overpaid tax in the year to April 2009. The revenue calculated that the figure in question was actually £1,000 and fined him £1,400 for the "mistake", despite the fact he had initially overpaid his tax.

Under new regulations issued by the UK government HM Revenue and Customs is now able to fine taxpayers up to 70% of any problem figures if they are found to be incorrect. In this instance HM Revenue and Customs has subtracted the figure of £1,000, the correct repayment, from the initial claim of £3,000 and issued a penalty equating to 70% of the £2,000 difference. It is rather bizarre to see HM Revenue and Customs introducing penalties for those who have overpaid although there are regulations which allow them to introduce penalties if errors were "deliberate and concealed".

The name of the gentleman involved has not been released although we can guarantee that he will not be the only person falling foul of this most bizarre of regulations introduced by HM Revenue and Customs.

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