Another section 29 question
A neighbour (really) made a royal mess of his 2009/10 tax return, overstating schedule E income and more importantly overstating tax deducted at source. The errors appear to stem mainly from him misreading his P60, which had been printed out of alignment with the stationery. On receiving his return, HMRC issued a refund for the difference between the tax deducted at source on his return less the tax actually deducted at source. Neighbour received the refund without appreciating what it was for. In fact his standard tax code exactly covered his liability for the year (but not tax due from the previous year - see below).
I have to confess that personal tax isn't my cup of tea, but I did say I would look at it for him. Having gone through the numbers I agree that he did get a repayment when he shouldn't have and also that, because they accepted the figures on his return, HMRC failed to demand another £1,000 that they claim had been coded out from 2008/09 into 2009/10 (although neighbour and his employer have no knowledge of a notice of coding for this). Neighbour is now unemployed and doesn't have the funds to make the repayment and pay the tax from 2008/09. My instinct is that he should pay it, but I feel I ought to also check that he is required to pay it.
Looking at schedule 29, HMRC need to rely, I believe, on either s.29(4) [fraudulent or negligent conduct] or s.29(5) [officer couldn't be expected to be aware of the need for assessment]. As the assessment relates solely to schedule E income and in particular to tax deducted at source for which HMRC had full details, presumably HMRC cannot now argue a case for s.29(5), which leaves fraud or negligence. Have I got this right, and do people here feel HMRC have grounds for claiming negligence?
Next question: HMRC have written that they intend to charge a penalty for failure to take reasonable care. Are there grounds for challenging this?
Final question: Ignoring section 29 for now, presumably HMRC are able to reclaim the over-repayment [repayment made in 2010/11; this correspondence started in 2011/12]. Is this correct?
- What would you do here, potential insolvency. 373 6
- VAT - Medical Staff 160 2
- Vat on construction of residential property 1,114 13
- Really?! 803 10
- CIS 199 5
- Entrepreneur - want to submit accounts by myself 1,169 16
- Auto enrolment confusion 1,372 26
- Separate companies same Director buy from each other 648 15
- VAT 701/49 query 223 2
- backpack 293 3
- Sage Line 50 Data conversion 155 3
- Bookkeeping question for Finance Lease payments 243 3
- Viewing folder contens en masse 347 8
- HMRC Funding for Employee PAYE refund 196 3
- Tax relief on Enterprise Investment Scheme subscriptions 158 2
- Calculation of 10 year anniversary charge 194 1
- pension contribution annual allowance charge 130 1
- Dominant influence and intercompany loans 255 6
- Company Car for Owner Director number crunching - is there a ready reckoner? 466 6
- How did you recalculate your payroll fees 906 12
- Self employed and HMRC Worldwide Subsistence Rates 705
- 2015 tax year end 440
- Interest paid - do new rules affect Tax Credits? 416
- Self employed consultant working in Ireland 356
- Costly Accounting Software contract 312
- Market Invoice (P2P invoice discounting) tax treatment 255
- Directors' advances and credits 254
- DTA tie-breaker issue 239
- Tax on internet ad sharing income 222
- Credit against UK NI for NI paid to EEC Countries 203