No doubt like everyone else, I am becoming increasingly frustrated at the delays at HMRC Inheritance Tax in dealing with even basic correspondence. Up to about eighteen months ago HMRC issued certificates for Probate in non-taxable estates almost by return but now even in non-taxable estates it is taking them four or five weeks to issue the IHT421. In some taxable estates I have been waiting for an IHT421 for over six months, even when the tax has been paid in full. Reminders have had no effect.
More worryingly, in August I applied for an inheritance tax reference in five taxable estates. I received a reference for one estate but there is no sign of a reference for the others. I cannot understand why a simple administrative matter like issuing a reference, which does not require any skill or knowledge of inheritance tax, can take so long. I need to pay the tax in one of those estates within the next few weeks before interest starts to run. Has anyone any suggestion as to how I can make an inheritance tax payment when I do not have a reference? Do colleagues think that the name and date of death as the reference on a bank transfer to HMRC would suffice? Should I attach a cheque to the Inheritance Tax Account, even though HMRC want payments to be sent to their Banking Section?
STEP should raise these delays with HMRC to see if the situation can be improved.
Having had similar issues, I’ve stopped applying for IHT numbers. I simply send in the IHT forms along with a cheque with the name of the deceased written on the back.
It is also worth noting that complaints against HMRC do speed up the process. I’m now at the point where I diarise my chasing letters and complaints ahead of time, and have template letters for this purpose. Initial letter, a chasing letter a month later, a second chasing letter a month after that, and a formal complaint a month after that. It is not unusual for me to have half a dozen open complaints against HMRC at any given time, but whatever it is I was complaining about is generally sorted within 30 days of the complaint letter. In one case I was even able to get them to pay our costs for chasing them.
Even three years ago I could not have imagined having to take this approach to HMRC, and I can only speculate as to how demoralising it is for the remaining staff.
Elliot, Bond & Banbury
I follow exactly the same procedure as Taureen so far as complaints are concerned. As she says a sad state of affairs. However I would not want to tell too many people about it as it will then stop working!
So what do you do if you don’t have any funds to pay by cheque and need to use the direct payment scheme?
I have a similar approach to dealing with HMRC. Whether it’s at the first stage of applying for a reference number, or later when waiting for a refund or clearance, everything is diarised for a follow up letter, then a telephone call, then a complaint. Sometimes the telephone call works but it’s got to the stage where making a complaint to HMRC is a fairly standard part of the administration of any taxable estate. I pity the staff and don’t like having to make all these complaints but what other option is there when the service is so poor?
Many thanks to those who have replied to my posting and especially to Taurean for suggesting making a complaint. It is indeed a sad state of affairs that the only way to get a response from HMRC is to make a complaint.
With regard to Julie Bullough’s comment about how to make a direct bank transfer without a reference, I had asked about this in my original posting and had asked if colleagues thought that, in the absence of a reference, a transfer to HMRC quoting the name and date of death would be sufficient?
I would be concerned about sending a payment without a reference as I would suspect the funds will end up in a suspense account. The problem then would be getting HMRC to locate it to set against the reference when it has been issued.
As an alternative you could consider purchasing a tax deposit certificate.
Greene & Greene
I always request an IHT Reference Number where an estate is taxable. However, HMRC seem to be having problems getting the written confirmation out. I then call HMRC when I am ready to finalise the IHT400 (or when I am ready to pay the IHT) and they give me the number over the phone. If by that time my request has not been processed, they take the details over the phone and issue the reference number there and then.
As for the IHT421, if after three to four weeks I am still waiting for the receipted form, I call HMRC and the form then usually arives a few days later.
I find that the easiest way to deal with delays is to phone them up. I diarise a phone call for about 2-3 weeks after sending in the paperwork. They are always helpful and it nearly always gets results. The hold time is not too long and I usually arrange to do more than one file per call.
So far as a reference is concerned the web form is the quickest way to get this.
No need then to complain.
I chase them by phone - documents come through directly after that. Mind you I have to queue for a while to have the phone answered. HMRC seems to be getting worse by the day.
What do you do if you haven’t got a National Insurance number for the deceased (say they died many years ago)?
Julian Cohen, Solicitor
Unfortunately you cannot apply for a reference online when the deceased did not have a National Insurance number. A lot of the taxable estates that I deal with are of non-UK domiciled individuals who never lived in the UK, so it is not possible to obtain a reference online in such an estate and I have to post the form IHT422 to HMRC.
In desperation to obtain outstanding references in three estates where I am ready to submit the IHT400 I telephoned HMRC last week. I put my telephone on speaker and got on with something else and my call was eventually answered after twenty minutes, which is somewhat excessive. It transpired that references had been allocated in all three estates but that the relevant letters had not been sent to me, which is not very helpful.
If you don’t have a National Insurance number, you cannot apply online and have to submit Form IHT422 in writing to HMRC.
I would like to take your approach to dealing with HMRC. Do you have a complaint template letter that works and if so would it be possible for you to email it to me (a bit presumptuous I know)? Many thanks.
There is no particular magic to it – I simply refer to my earlier letters (listing the dates of each letter) and note that as I have not yet received a response to those letters I want to open a formal complaint against HMRC. This forces the caseworker to forward the letter to their manager, and, knowing that their work is about to be subject to scrutiny, there is coincidentally a burst of activity on the file. It is this burst of activity, far more than the actual complaint, that we are trying to generate with our letters.
My one tip would be to put the word ‘complaint’ clearly in the subject line. Before I started doing that some of my complaints were missed because nobody actually bothered to read the text of the letter. By putting the complaint in the subject line it is harder for them to miss it.
Elliot, Bond & Banbury