Share this content

May I have this Community's help please

I know we cannot hide behind the old agent and the client is unlikely to sue them for compensation.

The matter is before the Commissioners in early December. I will not claim 'reasonable excuse' for the non-submission of the Return, just that the amount is unreasonable.

Question 1.
Do the Commissioners have the power to vary the penalty if they agree that HMRC have acted unreasonably? The Clerk is very able (a solicitor) and I fear he will tell me going in that I cannot argue this.

Question 2.
Can anyone quote from similar experiences or name precedents to support me?

My grounds for saying that the penalty is unreasonable
In every other field I know of (CT, Self Assessment etc), HMRC send out regular statements of account. If you fail to file a Return by the first deadline, you get a penalty notice. So when you get the second penalty, you ought to know what you are in for. Besides, the first penalty will have triggered a series of statements of account.

By contrast, for Employers' PAYE they regularly save things until NINE penalties have fallen due - a "nice little earner" I have called it. If there are nine penalties, there should be nine Notices. If there is one notice, there should only be one penalty.

Most interesting is to examine why this is. I believe it is simply technical failings in their systems. We know that there are still 12 PAYE computers which we are told is why we cannot see statements of account online as we do with the other taxes. But that should not prevent Employers from being sent Statements of Account as a matter of course. I consistently find advising Employers about their liabilities the most difficult - like "seeing through a glass darkly".

And then there is the reason for the 9 months' delay. For the three years I have been involved with online P35s, that is about how long we have had to wait for things to process, due to the monstrous cock-ups with a system that makes us file by late May but cannot process without human intervention the other end.

Your comments please - I will tell you how we get on before the Commissioners. I think there is trouble ahead with CIS so this may be a useful topic for debate.

David Ross


Please login or register to join the discussion.

29th Nov 2007 16:35

I would agree with the earlier comments
and I also agree that the system is totally biased. As regards advice, I would say that the best chance may be to contact HMRC directly and appeal to their better nature.
You could always threaten to get the papers involved, and the way things are at the moment, they are unlikely to want further adverse publicity. Good luck and update us in due course.

Thanks (0)
30th Nov 2007 09:20

CIS penalty
I think you would be better going down the reasonable excuse route.

Bysermaw Properties Limited failed to submit its CIS return and claimed the penalty was 'grossly disproportionate’ : -

The company lost.

A Mrs A M Rowland successfully appealed against a penalty for the late payment of her SA tax on the basis that she relied on advice from her accountant : -

Then argue that the reasonable excuse existed throughout the period of default because of the problems with the PAYE system - had HMRC told the company earlier it would have done something about it.

Thanks (0)
By bobhurn
29th Nov 2007 17:31

Tax Payers Charter
I have a similar situation with a P35 supposedly not received online and a penalty issued after 5 months of £500.

I intend to argue that these notices are computer generated, therefore HMRC must have chosen to delay the issuing of the notice and the only reason for this can be to increase penalties. This combined with the fact that there was a nil liability (thus the penalty is excessive) breaches HMRC's obligation to treat the taxpayer fairly.

At the moment HMRC are refusing to list this case for the Commissioners as they feel it would be unsuccessful. Thus we are having to file a complaint to remind them that the taxpayer has the right of appeal irrespective of their opinion.

Will have to wait and see what happens but the comments below don't appear to give too much hope. I am beginning to wonder if there is any point in having commissioners if they appear to act as HMRC's advocate.

Thanks (0)
By Anonymous
29th Nov 2007 19:32

The Revenue will argue that it is not their duty to issue reminders but it is the taxpayers duty to file their returns on time.

Thanks (0)
29th Nov 2007 21:39

Listing of appeals
This is not down to HMRC - Robert - have you tried writing direct to the Clerk to request a listing?

Thanks (0)
30th Nov 2007 09:43

Thanks guys - please keep the comments coming
I think the 'reasonable excuse' line is a good one, and Robert and Stephen's comments are most helpful - I shall use the line "had HMRC told him earlier he would have done something about it". Interestingly I did not realise the form had not been filed when the penalty came. I immediately appealed (January 2007) and it was only in SEPTEMBER 2007 (!!!) that they told me they did not have it and sent me another form - which of course I sent back straight away. We have not had another penalty for the intervening months!

I do think that as Taxpayers' Representatives we have a responsibility to fight tooth and nail for our clients. This matter is listed before the Commissioners and the Tax Office cannot refuse that - so if everyone took up these bad cases, of which there are so many, we might get somewhere.

By the way, I was quite surprised that the Tax Office did not just remit this one. All the tax was paid in at the proper time, the one subbie had his CIS25s so the CIS36 is just a reconciling form.

Thanks (0)
12th Dec 2007 10:40

Success !!
Thanks once again for the Community's help. We got the £900 wiped out yesterday by the Commissioners.

A good point made by the Clerk - the Commissioners have no power to vary the amount of the penalty, (we would have been happy with £100), they either have to uphold or strike out the whole thing. The Clerk also slapped the Inspector down when he mentioned that the client had been late in past years with his CIS36s - apparently they must not take his 'previous' into account!

So it was just as well I argued that 'reasonable excuse' existed because the client changed agents at the crucial time. I feel very strongly about 'penalty stacking' and that the bill was only £900 because HMRC sat on their hands for so long, but as I said to the Commissioners, I did not expect them to take a stand on a National issue like this.

So it turns out to have been wise to focus on my client - who, after all is who I work for and who faced such a big and unreasonable bill.

And the feedback to the rest of you is it is worth going for the Commissioners' sympathy in cases like this - dig up every excuse you can. And it helped us that the client had paid his deductions over in time, supplied CIS25s, just the CIS36 got overlooked.

And ................ Jury Nullification is an issue worthy of study in this field. see

Thanks (0)
By bobhurn
12th Dec 2007 13:38

My one comes up for a Commissioners hearing soon, only £500 but the pricipal is the same. Your experience has given me fresh hope.

Thanks (0)