Can Hmrc issue a penalty for 2013 tax returns already?

Can Hmrc issue a penalty for 2013 tax returns...

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We submitted a 2013 SA return for a client in jul 2013. It then came to light that a large dividend had been omitted from the return and it was resubmitted in dec 13 with the correction. Hmrc have now threatened to add a penalty as they consider the omission was deliberate.

Can they add penalties like this when the deadline for submitting the return hasn't passed yet?

Replies (8)

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By JCresswellTax
22nd Jan 2014 17:36

Yes

The penalty isn't for a late return but for an incorrect return.

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By cparker87
22nd Jan 2014 21:35

Did you approach them with the correction?
With it being a dividend, I expect so. I would be surprised and disappointed if HMRC do carry out their threat. Everyone makes mistakes. Just kindly point that out and raise the point that the treasury hasn't lost a bean.

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By User deleted
22nd Jan 2014 22:20

Doesn't matter that no tax has been lost

Penalties are based on potential, not actual, tax lost. Having said that, it would be a harsh Inspector indeed that imposed a penalty. Deliberate omission doesn't square with voluntary correction before the deadline (assuming it was voluntary).

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Replying to paulwakefield1:
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By cparker87
22nd Jan 2014 22:25

.

BKD wrote:

Penalties are based on potential, not actual, tax lost. Having said that, it would be a harsh Inspector indeed that imposed a penalty. Deliberate omission doesn't square with voluntary correction before the deadline (assuming it was voluntary).

Whilst you are of course correct with reference to the potential lost revenue, the fact that no tax has actually been lost is a moral bargaining chip I wouldn't miss in any correspondence.

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By TOC
27th Jan 2014 14:13

Tax Returns

I was under impression tax return could be amended at any time up to filing deadline so no penalty is due.

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Replying to C.Y.Nical:
Stepurhan
By stepurhan
28th Jan 2014 09:51

Amendment and forced change

TOC wrote:
I was under impression tax return could be amended at any time up to filing deadline so no penalty is due.
If it is simply an amendment due to an innocent error, then that is one thing. If it is an omission that has been picked up by HMRC who have then forced a change, that is another. In the latter case, it would be the discovery of an error by HMRC that gave rise to the penalty. Whether HMRC would be justified in applying a penalty when any additional tax wasn't even due yet is a matter for debate.
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By Marion Hayes
28th Jan 2014 09:45

To answer the headline

Yes - you can receive a penalty for late filing now if the Return has been sent in on paper.

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By louisVW4
28th Jan 2014 10:40

I did the same thing 2 days ago...

...but picked it up yesterday, and submitted an amended return.  I included the total in the box for 'personal services company' but simply forgot to add my dividend to the worksheet.

The amount was significant enough to make me question my own return when I looked at the calculation.  I would question why your client did not tell you about it for 6 months.

 

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