Problem with supposedly overdue P35

Problem with supposedly overdue P35

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I have a problem with the good ol' taxman on behalf of a client. We submitted a P35 and P14s etc in time for 19 May 2006 ( now we only do electronic). However the folk at Stationery order line only sent P60s and not P14s so we filled in 2005 P14s and changed the date and sent in a covering letter.

HMR&C sent the whole lot back asking for it to be done only on current staionery. as that had then arrived, we complied and sent it back. ( but did not send it registered delivery)

We have just been informed that they are claiming never to have received the revised paperwork. And this despite the fact that we have been corresponding that the client had overpaid for that year.

Taxman is now saying we must send in the form. We are happy to transmit it electronically or however, but he is also saying he will be seeking over £2000 in late filing fees - that latter by phone - no letter or fine notes have ever been received.

does anyone know if there is a legal precendent where we can assert that the information has been given and he has no right to insist on it being on his own stationery?

Also, is he allowed to wait this long before demanding £100 per month? We asked why there had been no correspondence and were just told "we cant be expected to chase up every late form" !

The perosn on the phone from the tax people admitted he was too junior to give definitive offers of waivers of fines etc - but also said that you cant speak to more senior staff on the phone!

All suggestions welcome!

David Lindfield

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Euan's picture
By Euan MacLennan
20th Feb 2008 14:38

Some thoughts
PAYE Regulation 73, which is headed "Annual return of relevant payments liable to deduction of tax (Forms P35 and P14)", lists the information that must be returned, but makes no further mention of forms P35 or P14 and does not specify that the information must be provided in a format determined by HMRC. Although I think we are all aware that the design of these forms has to be approved by HMRC, there is no legal requirement set out in Reg.73. It is Reg.73((10) which invokes the special £100 a month penalties under s.98A TMA 1970.

It seems to me that you have complied with the law in Reg.73 by submitting a 2005/06 P35, presumably on the proper form and duly signed, supported by the information required for each employee by Reg.73(4), albeit on incorrect forms P14. I assume that you can produce the letter from HMRC returning the whole lot to confirm that HMRC must have received the correct P35 with all the required supporting information in the first place, hopefully by the due date.

You should not therefore be subject to any penalties invoked under Reg.73.

I think it was unwise to use out of date forms P14, but no doubt the deadline was imminent. "Lost in the post" and the delay in notifying monthly penalties until many months have elapsed are topics which have been raised many times on this website with no satisfactory conclusion. I would concentrate on the legal argument that you have complied with PAYE Reg.73.

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