Have submitted partnership returns for 2008-2009 & 2009-2010,the returns were late and penalties were raised, on submission of the returns, which showed refunds due the individual's penalties were vacated, but when the refund came through HMRC had retained the penalties due on the partnership returns. Is this correct? can't find any info on HMRC website relating to this.
Thanks
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Yes
HMRC should have paid the tax refunds net of the partnership penalties due. Unless you've successfully appealed the partnership penalties, they are payable, no matter how much tax was or wasn't due.