Late 2009 return - aggressive telephone call from HMRC threatening client

I had a rather distressed female professional client call me today as she had received a telephone call from HMRC on Saturday morning. The client had called me in January to apologise for the fact that she had not been able to supply the information required to complete her tax return as her brother-in-law had been killed and she was therefore staying with her sister to help with childcare etc. In addition, my client is pregnant and has one child of her own. I explained that she should not worry and that as long as she pays sufficient tax by 31 January, any penalty will be cancelled once the return is eventually submitted - in fact she was so worried that she very significantly overpaid.

In the course of Saturday's call, my client was told by the Revenue officer (who my client described as "very aggressive") that she "would give her a deadline of one week to submit the return or there might be legal ramifications". I assume the Revenue officer was referring to daily penalties. My client explained that this would be very difficult as she may not be able to organise childcare at such short notice, to enable her to get everything together. The officer then said that in the circumstances she would give her until Saturday 13 March to submit the return. My client told the officer that she had paid her tax as advised by her accountant and she understood that the £100 penalty would not therefore arise. The tax officer said this was incorrect and that the penalty will stand as well as there being the further legal ramifications referred to above if she missed the deadline!

My client has now arranged for a relative to stay to enable her to get the return information together and has asked me if I could deal with the return as soon as the information is brought into the office. She asked me what would happen if she could not meet the 13 March deadline and I told her that daily penalties could arise but that advance written warning has to be given and that I would be extremely surprised if any action was taken whatsoever. I also explained that the £100 penalty would be cancelled notwithstanding the Revenue officer's statement.

In my experience, daily penalties have in the past only been sought where the return is very late (sometimes years late). I have never come across cases where these are sought only a few weeks after the due date.

My client does not wish me to make a complaint about the officer's heavy handed approach but I just wanted to warn others that the Revenue seem to be taking a very aggressive stance with direct telephone calls. Also, was I correct in advising that there can be no £100 penalty when all tax has been paid on time?