HMRC rejected Tax Returns

HMRC rejected Tax Returns

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We were contacted by a client last year to complete her tax returns going back 1997/98 to 2008/09. having setting up the client and 64-8 sent to tax office, it came to our attention that they have a tax determination for the o/s years totalling £25k. I Spoke to the officer in charge and she told me if we have the returns completed the determination will be adjusted accordingly. I even made her aware that the time limit has passed e.g 1997/98 ran out 31/01/2004 etc. She said we should submit them and they will all be amended.

All returns were sent off and now received a letter  saying ......."The time limit for a 1997/98 SA ran out 31/01/04, 1998/99 on 31/1/805, for 1999/200 on 31/01/06 etc. As I received the returns after theses dates i do not intend to take any further action regarding the information contained in them" I have cancelled the fixed automatic penalties for all five years.

Hence they are standing by there determination of £25k less penalties cancelled.

For the record, we do have a letter from the client's GP that she has a long standing Chronic Depression. This is why all her returns were late. Also all the completed returns has no liability,most have a refund but nothing big.

Has anyone experienced this and whats the best way to deal with it.

Thank you

Replies (11)

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By cymraeg_draig
18th Feb 2010 19:33

I wish everyone would learn to tape record all contact with HMRC

Did you record the initial undertaking to accept them and adjust? 

Whatever their "rules" might say the courts have repeatedly ruled that it is the role of HMRC to collect the proper amount of tax which would have been due had the returns been submitted on time (plus appropriate interest).  It depends on the amounts involved (ie difference beweeen HMRC assessment and actual tax liability) but may be worth challenging in the courts. Forget HMRC appeals proceedure - total waste of time.

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By pawncob
18th Feb 2010 20:19

Time limit

The time limit is 1 year, and there is no provision which enables this to be varied.

Were the determinations made within the 5 year time limit?

 

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By User deleted
18th Feb 2010 21:53

Equitable liability

Consider a claim invoking the above principle. This is the only way you can adjust tax due under a determination that is now out of time for filing a return.

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By cymraeg_draig
18th Feb 2010 22:40

Actually.................
Time limit

The time limit is 1 year, and there is no provision which enables this to be varied.

 

Posted by pawncob on Thu, 18/02/2010 - 20:19

 

Actually the courts can, and do, often vary them. Nothing in tax legislation is capable of overriding the courts ultimate authority to apply natural justice.

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By AnthonyDavidMain
19th Feb 2010 09:47

There is hope....
As the "Welsh Dragon" states, the Courts can and do overturn HMRC decision and this may well be a route worthy of consideration if commercially sensible.

As regards the concept of equitable liability, this should let you go back six years or so and is worth taking up with HMRC.

Best regards

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By DeborahLesley
19th Feb 2010 11:45

Equitable Basis

 

Would this apply to you

www.hmrc.gov.uk/pbr2009/pbrn34.pdf 

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By orchardacc
19th Feb 2010 12:15

Thank you all for the response. Ver very helpful.

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By EQUILIA
02nd Feb 2011 11:55

Joe Hannigan Equitable Liability )1392 833054

 There are no time limits see Section 32 TMA 1970.  This relates to Relief for Excessive Assessments.

The main purpose of the section.

Ignore Double Assessment it is a nonsense to say it relates to Double Assessments only.

It appears that that the lady sending  the second letter has deliberately misinformed you about out of date years.

Appeal immediately under Section 32 TMA to the tax Tribunal copying the Revenue as the Revenue will waste your time with a review. DO THIS IMMEDIATELY OR YOU MIGHT FALL INTO THE SECTION 28 c. TRAP.

gIVE ME A CALL FOR BRIEF DISCUSSION 

 

 

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By Helen Crowley
02nd Feb 2011 12:41

Equitable Liability

It was a few years ago to be fair (probably around 5) but I did manage to claim Equitable Liability on behalf of a client to displace the Determinations that hadn't been appealed against within the time limits. It saved almost £100K in the end! It was a lengthy process and time consuming to pursue but obviously the client was very happy in the end! The files within HMRC all had to be sent to one of HMRC's "Enforcement" Offices for them to review. We also had to explain in detail why appeals weren't lodged against the determinations when they were issued and also clearly demonstrate why the determinations were excessive. One of the ways we did this was by obtaining a copy of the last Return that had been filed on time etc which included low figures of income plus a cessation and point out that HMRC had not based it's Determinations on this information but had in fact used "Excessive" figures.

http://www.hmrc.gov.uk/bulletins/tb18.htm#excessive assessments (you might need to scroll down to "Excessive assessments)

As other answers have said this procedure was due to be abolished but HMRC listened to representations and there was a Consultation on draft legislation last year. It seems that you can therefore pursue this in your case. Many at HMRC (and within the profession) have never heard of it so be prepared to direct them to manuals and Tax Bulletins as necessary and also insist that HMRC sent their files to an Enforcement Office (assuming one still exists!) for review. Also send a copy of your letter claiming Equitable Liability to the Accounts Office/Collection Office who presumably are currently pursuing your client for payment 

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By EQUILIA
23rd Mar 2011 16:44

Appeals under Section 32 TMA must be made before the end of this

 Get your appeal on against Excessive Determinations in fast to 1st Tribunal and later copy HMRC. 

The amoral approch to those sufering depression adopted by HMRC is a disgrace to the human race.

Of course one can appeal a determination if excessive.

Be happy to discuss it with you. I understand your concern.

Joe Hannigan 01392 833054

Joe Hannigan

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By elyob
29th Feb 2012 09:48

VARIATION OF DIVISION OF RENTAL INCOME

Division of Rental Income

Husband and wife own property and have net rental income of 200,000.

Can they vary the division of those rental monies on a yearly basis, if they choose. By this  I mean in 2009/10 if they choose could they allocate the rental income Mr - £150,000 , Mrs -£50,000 and then in 2010/11 change it to Mr - £100,000, Mrs - £100,000.

2.        I have a problem with a determination being raised on 31 October 2010 for the year ended 05/04/2008 which we don’t recall receiving or if we did  was missed by us and is out of time to appeal  by submission of the return, not yet done,(assuming one year to be the time allowed).

 3        The determination of tax due is excessive by £50,000 (obviously a worry for us ) .

 4        With respect to entering an appeal to the tribunal i have read this is the way to go and that the tribunal and the courts are guided by the principal that hmrc are charged to collect only the tax that is due from a tax payer and if that tax payer is lax in dealing with their affairs then they have the facility to charge interest and penalties but not to charge a random amount of tax based on no facts...........................i do not know if this is correct and would be grateful for contact from anyone who has gone through the process recently.

.

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