We have a client who on 06 April 2011 was issued with a notice to file a personal self assessment tax return form SA100 for the tax year 2010-11. It has not yet been filed and he has long since been penalised to the max at £1600, which we accept as a sunk cost. He was not required to make payments on account.
Is there any point now in filing the return? By paper of course; electronic not an option.
His return would, if accepted, show an overpayment of tax (PAYE). But presumably it is now too late to get it back.
As I see it, the only benefit would be that it no longer shows as outstanding. If we did nothing, could HMRC issue determinations now, and would they in practice do so?
Thanks
With kind regards
Clint Westwood
Replies (6)
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Why not?
Back in 2012 I took on client who had not filed any returns from 2005-06 and paid all the penalties.
I got these all up to date and sent off the ones done on paper and filed the others online.
Each return there was a small amount of tax due which client had to pay - so why would HMRC not refund an overpayment?
Yeah I know HMRC make up the rules as they go along 'allegedly' but I would argue the case if need be!
You ask if there is any point in filing return now - are you saying HMRC are not asking for it anymore or have I just misunderstood?
Edit: noticed spelling mistake!
The problem that you have is, if HMRC do suddenly decide to issue a determination, then that can only be displaced by submission of the Return. If the Return is submitted outside of the four year time limit, you may find that you can't displace the determination and your client will have a tax liability that should never have arisen and which can't be removed.
I'd personally be tempted to file.
I agree
Yes, I would file the return especially as you say it is sitting on his SA record as outstanding.
Better to give the information that none at all don't you think?
Just a thought
Because of the particular type of work I get involved in (dealing with cases of persons accused or convicted of criminal offences) I know that investigators & prosecutors (the police, Benefits Agency, local authorities, etc) often obtain the tax history of a suspected person from HMRC. Where no tax return has been filed the assumption may be made (or it may be inferred) that the suspect has been living off proceeds of crime.
I expect that you do not anticipate that this client will become a suspect in a criminal investigation - but you never know! So, from that point of view, a more complete tax history showing that legitimate income has been declared (albeit declared very late) may be helpful.
David
Good advice David
Thank you for that information - I hadn't actually thought of it in those terms but what you say makes sense.
Marilyn