Tangled tale over 4p contradicts the slogan 'tax doesn't have to be taxing'

The Inland Revenue has spent thousands of pounds advertising the fact that next Saturday is the deadline for sending in self-assessment tax returns. But while the publicity is geared to claiming what a simple process it is, I found myself embroiled in an incredibly tangled tale - all over 4p.

I am a chartered accountant, retired after many years in industry. I have an occupational pension (with tax deducted under PAYE), a state pension (tax collected through the PAYE coding on my main pension), dividends and interest from investments (tax deducted at source) and nothing else - capital gains or untaxed income. You would think that self-assessment was not necessary. Unfortunately (for myself and everyone else involved) the tax men and women think otherwise.

In March 2002, I returned a repayment order for £327.66 in respect of 1999/2000, where the tax authorities thought I was entitled to the higher, age-related personal allowance, despite a letter from me in September 1999 saying that I would not be entitled due to my income. As a reward for my honesty, the tax lady sent me an eight-page self-assessment form for the next year (2000/2001), with a 30-page tax return guide, a 16-page tax calculation guide and an employment form with notes (10 more pages). She insisted I complete this. All this produced a net underpayment of £1.92, due entirely to the approximations involved in the operation of the PAYE system.

On 10 April 2003, another self-assessment form arrived (for 2002/2003), this time of 10 pages plus 54 pages of guides. Despite my professional qualification and experience, it took me two and half hours to complete and I sent it off on 12 April for the Revenue to make the calculations. I also sent off, by separate post, a letter enclosing my computations of tax unpaid for 2001/2002 and 2002/2003, and referring to the unsatisfactory way my tax affairs had been handled over the previous five years since I had retired. I drew particular attention to the fact that it had taken the authorities four months to deal with an overpayment of tax by me approaching £5,000, despite my providing detailed computations of my claim.

On 30 May last year, I duly received the Revenue self-assessment tax calculation, which showed the princely sum of 4p underpaid. My original calculation showed £1.59, due to the inherent limitations of the PAYE system. The reduction of £1.55 in the Revenue calculation was due to the further inherent limitations in a system that rounds down income and rounds up tax deducted. The two-page calculation was accompanied by two leaflets - "Understanding your tax calculation" and "How to pay". Sadly, the latter includes no provision for paying cash, so when I visited the local Inland Revenue enquiry centre with two 2p coins, they suggested they wrote off the balance rather than confuse the system. Nobody made any reference to the more serious underpayment that I had shown on my computation for 2000/2001: £2.04. How ever does Gordon Brown cope with loss of so much tax revenue?

In October, I received a letter inviting me to file my tax return online, with the slogan, "Tax doesn't have to be taxing", which is being repeated in television advertisements. Little do they know.

On Christmas Eve, I received a self-assessment statement of account, showing that, according to their records, I still owed 4p. They enclosed a leaflet warning me about penalties for late returns or late payment, and a freepost envelope for my payment which I didn't think strong enough for my two 2p coins. Once again, I called at the enquiry centre with them. The lady there made a couple of telephone calls to the collector of taxes and assured me the balance would be written off. We both waited for a few minutes but, as nothing seemed to be happening, I said I would come back in the New Year.

I called in on 6 January and spoke to the same lady, who checked and found there had been no change. She, once again, telephoned the collector, where the lady said the system was very slow, but she would investigate and let the enquiry office lady know what was happening. She, in turn, telephoned me that evening to say that the write-off couldn't be actioned until after the final due date - 31 January. The collector would write to confirm this. As ever, the staff were extremely courteous.

My response to this news was to cry, "No! Mercy!" I was too late. Two weeks ago a letter arrived from the receivables management service, Northampton Recovery Office (and there I was thinking it was still the collector of taxes) confirming that the amount of 00.04p (sic) cannot be removed until after 31 January. The lady will take the necessary action on 1 February and then contact me and the lady at the enquiry centre to notify us both that this has been completed.

If you added up the hours involved, the postage and telephone costs, the number of trees cut down to produce the paper, how much did my two self-assessments cost compared to the £00.04 tax due (but not collected) and £1.92 paid?

After two months, the overworked man in the area complaints team came back to me over my complaint about the £5,000 refund that took so long, and admitted: "It is clear that we have not handled your tax affairs as well as we should have." His surname was Meaning. Was he meaning "tax doesn't have to be taxing" or something else?