How reduce Failure to notify penalty?

How reduce Failure to notify penalty?

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How reduce Failure to notify penalty? What would be reasonable excuse?

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By billgilcom
20th Mar 2011 11:13

FTN

The simple answer is that an excuse to be reasonable will depend on the facts of each case and the individual or circumstances.

For example the person may have "reasonably" considered that they were not liable to tax or been advised by a professional that that was the case and it was reasonable to hold that view.

The HMRC manauals would be a good bed time read and starting with http://www.hmrc.gov.uk/manuals/emmanual/em5155.htm where the HMRC speculate on the type and nature of defences potentially put forward. Of course there is always some truth in the saying that "I have heard it all before" and am (unsym)pathetic.

Remember also that if you have been able to manage to keep your head above water and kept a decent business going with undeclared profits then why would it be reasonable for you to be able to fulfil your business commitments and yet fail to even notify your chargeability to tax - when all that was needed was a phone call or quick letter to HMRC to say "I am self employed what do I do?".

Of course if you want to test out your "perceived" reasonable excuse you should engage the services of an experienced tax investigation specialist as there is nothing worse for jacking up a penalty by giving spurious and ill thought out "reasonable excuses" that in the eventual analysis does not hold water.

Of course to reduce any penalty then you need to make a voluntary disclosure as soon as you are able, make it complete, cooperate in establishing all matters with HMRC and of course convince them that it was all as innocent as you can make it (without gilding the lilly too much that it becomes unbeleivable). Of course beyond everything tell the truth 

Under the post 2009 penalties regime you do of course need to convince HMRC that your actions were from carelessness as opposed to deliberate although FTN still carries up to 20 years (of back tax and interest and penalties). You could now also become the talk of the pub if your actions were deliberate and you didn't come forward voluntarily and ended up on the Deliberate Defaulters list for 12 months

hope that this helps

[email protected]

www.wamstaxltd.com

 

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By billgilcom
20th Mar 2011 11:28

HMRC's attitude in matters

if you look at EM5156 (http://www.hmrc.gov.uk/manuals/emmanual/em5156.htm ) you will see that HMRC base their attitude on case law (where of course it suits them) and staff are reminded of the words of the noteworthy Rowlatt who made many clear analysis 

The comment of Rowlatt, J, in Attorney-General v Johnstone, 10TC at page 763, is useful

This is a very bad case. Here is a man who says he put down £300 BONA FIDE, when he was making £1,500 and had been making it for years.Do you tell me that a man who can conduct a successful business - he says he does it all himself - making £1,500 a year does not know at the end of the year what his books show? His banking account will tell him; his household expenses will tell him; what he has in his pocket will tell him. He would know if he made £300 or £1,500. It is no use putting up this argument to me or to anybody else who knows anything of human affairs.  

Careful note should be taken of indications of concealment (for example, savings spread over a number of accounts) or other signs of intentional evasion.

Of course those comments are more akin to understatement but the sentiments are there. Don't beleive it unless it is irrefutable

And of course you have to remember S118(2) which said that if you had a reasonable excuse and it came to an end then if there was any unreasonable delay in notifying HMRC after that then you are negligent anyway.

[email protected]

 

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By B Adder
20th Mar 2011 13:31

If your excuse does not hold water

Try the Plumbers' Tax Safe Plan

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By billgilcom
20th Mar 2011 17:29

Plumbers Safe Tax Plan

Hi B Adder (what an apt name for an accountant) & questioner

Remember you cannot take up any amnesty if you qualified but failed to take up any previous one or if HMRC has already opened an enquiry. 

Questioner - if client not a plumber then make sure HMRC are made aware of that when you take it up

[email protected]

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By cymraeg_draig
20th Mar 2011 18:17

Don't bother -

Whatever you say nothing is a "reasonable excuse". 

They told me that having a heart attack in December and spending January in intensive care fighting for your life did "not constitute a reasonable excuse" for submitting a return late. 

Admittedly they did back down when I told them to fine me £100 penalty, shove it in some convenient orifice, and I looked forward to seeing whether a Judge thought their attitude was "reasonable". 

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By billgilcom
20th Mar 2011 21:50

You welsh wizard

Such a cutie and you've got almost as good and forthright an attitude as myself. 

Surely they were being unreasonable LOL and they would have no reasonable excuse for that - except knowing it was your goodself

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By cymraeg_draig
20th Mar 2011 22:37

.

Surely they were being unreasonable LOL and they would have no reasonable excuse for that - except knowing it was your goodself

 

Posted by billgilcom on Sun, 20/03/2011 - 21:50

 

Perhaps the idiot who said it thought he was being "clever" - I bet he didnt feel so bright when a couple of days later his boss received a tape recording of his stupid comments.  T

hey tape all calls so we are legally entitled to also tape them without notifying them, and I always record every conversation with HMRC.  I'd trust Col. Gaddafi with an atomic warhead more than I'd trust HMRC to tell the truth.

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By billgilcom
21st Mar 2011 01:52

Taping calls

I suppose that you are technically correct C_D however that would only be for training purposes through the automated systems. You are incorrect however if you are suggesting that HMRC staff generally have a tape recorder taping your conversations...... mind you ......

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By cymraeg_draig
21st Mar 2011 09:38

billgilcom

 You are incorrect however if you are suggesting that HMRC staff generally have a tape recorder taping your conversations...... mind you ......

 

Posted by billgilcom on Mon, 21/03/2011 - 01:52

 

Whether or not they do tape the conversation is irrelevent. The relevant point is that they (HMRC) state that all calls are, or may be, recorded. Therefore their staff are aware that calls may be recorded (the purpose is irrelevent).  This knowledge removes from us the requirement to warn them that we may also record the call.

Incidently, try making a complaint about something said in a phone call by HMRC. If the tape clears their staff of blame they will always produce it, if it condemns their staff it's amazing how that call was never recorded. I consider this far more than coincidence, the word I would use is corruption. 

Hence we record every call to or from HMRC. 

 

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