HMRC penalties

HMRC penalties

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I have a client that, due to moving house several times, fell behind with her tax returns. The income is a tiny s/e 'hobby,' turnover less than £5k per annum. I am in the process of bringing these up to date and have filed the 2010/11 and 2011/12 returns (unfortunately before the new amnesty!). There is no liability in either year but for 2010/11 the penalties are £1,200 including £900 daily penalties! I have appealed all the penalties. As there is no liability, I have argued that there is no requirement to inform HMRC of the need to complete an ITR (under s7 TMA 1970) and as no ITR or a notice to complete one was received, the returns were not filed late as there was effectively no deadline to file. By way of explanation - due to moving house she never received any documentation, penalty notices or warnings or anything until a demand for payment from the collection wing of HMRC.  HMRC's response to my appeal - - they cannot accept the appeal as it is made too late! I cannot believe how anyone can see this is fair or reasonable.    Has anyone else come across this and had success getting HMRC to accept a late appeal?    

Replies (13)

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By stratty
29th Jul 2013 16:31

Change of Address

I think you will probably find it is the taxpayers responsibility to notify HMRC of the change of address.  

There was a recent court case about the validity of these daily penalties.  Do a search on AWeb as there is an article about it.

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By Anthony123
29th Jul 2013 17:16

Late appeal

Whilst HMRC can decline to consider a late appeal you can always ask the tribunal to consider if a late appeal can be accepted.

From what you say it sounds like a notice to file was issued but to the old address. In that case the argument that there was no liability to notify does not apply.

Look at the daily penalties case and then appeal to the tribunal.

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By ma7306
05th Aug 2013 12:57

Appeal againt the penalties - 2010-11

Recently we had the same situation where client received a penalty of £1200. We appealed on the basis that client never received a notification due to change of address. To our surprise HMRC accepted the appeal and cancelled the penalty under Section 54 Taxes Management Act 1970.

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By Eldon
05th Aug 2013 18:02

Independant Review

I recently had a similar situation; client moved, didn't receive notice to file, and the tax due was only some £60 due in respect of his PAYE employment P11D, and not in respect of his small company.

My appeal was rejected. I wrote to the Appeals & Review Unit in Londonderry, asking for an independant review. This review upheld my appeal

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By wrilliams
05th Aug 2013 19:49

Independent Review and Daily Penalties article

My experience of reviews by the Appeals Review Unit is that the answer is usually "No".  Also, I understand that HMRC are going to appeal the Morgan and Donaldson decisions.

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By Homeworker
06th Aug 2013 15:33

Tax-geared penalties

I have just sent in two years tax returns for a new client who got behind.

She had made substantial (and excessive) payments of tax up front but has nevertheless been charged tax-geared penalties of nearly £2,500.  Is there any point in appealing against these?

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Replying to Wanderer:
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By wrilliams
06th Aug 2013 20:15

Tax geared penalties are applied in the cases of "failure to notify" and "incorrect return" and are based on the tax "lost".  If your client has received notice to file Tax Returns but has not filed them by the appropriate deadline date then the penalties are initial and daily penalties in accordance with the" late tax return" penalty regime.  Unless the client can show that the notices to file were not received and  she had no reason to expect that her tax affairs were not in order she is likely to receive short shrift from HMRC.  Payment of tax up front is not sufficient to negate these penalties (as is the case if no tax is actually due).  You need to examine the reasons for which the tax returns were delayed and see whether these fit within the HMRC "reasonable excuse" criteria - such as disaster, serious illness, death.  If the client simply did not get round to dealing with the tax returns because they were too busy or disorganised you will be wasting your time.

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By ashbury
12th Aug 2013 11:27

This is typical of the nonsense created by the HMRC jobsworths who are more concerned with persecuting small businesses over trifles than chasing big companies for millions. They always want to push on the easy door. I'd suggest that your client says that she was unable to file her returns because of being preoccupied with serious family problems at the time - marital, health, she'll be able to find something, always can - and then she'll be excused. HMRC deserve the same sort of treatment in return that they dish out. It's about time that taxpayers stopped accepting their unreasonable behaviour as being 'the norm' especially in these difficult economic times.

Now wait for the brick-bats :-(

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By Arcadia
12th Aug 2013 18:57

Notices to agent

Were you the agent during the period concerned? I have a very similar situation, but despite filing the 64-8 (on paper), and corresponding with HMRC about a previous tax year, I received no notices or correspondence whatsoever in relation to the tax year concerned. I even wrote at one  point and asked for a UTR, and got no reply. Is failure to inform the agent, or reply to him/her grounds for appeal?

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By Minnie136
12th Aug 2013 19:35

I never get copies of penalties

I do not seem to get an agent copy of a reminder or penalty.  I am not sure if they send them to the agent.  However only been going 6 months (although I know that one client was so behind that he got penalties for everything and I did not get copies).

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By Jon Stow
13th Aug 2013 12:34

If your client did not get the penalty notices

then you have a good chance on appeal. I had a recent success where the client had moved and did not receive his late filing penalty notices including the daily penalty notice. As these were all returned undelivered or "gone away" HMRC accepted the client had not seen them and the appeal against all the penalties was accepted.

HMRC can be reasonable, but usually on the first appeal you get a standard response. It pays to persist and the recent cases are very helpful.

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By fkhan74695
14th Dec 2014 16:10

Late personal tax return penalty

My client has received a £1,200 penalty for non-filing of the tax return for 2011-12. The client was self-employed but the turnover was always below the lower threshold limit. The client didn't know that being a self-employed he needs to file the tax return by 31st Jan. He is living at the same address since Jan 2011 but has never received any notice for filing the tax return so he assumed that no return is needed. Now this client approached me to look at his matter at the time when he received this penalty notice. He has been at his current address since Jan 2011 so it will not be a reasonable excuse to appeal can someone help me how we can appeal against HMRC penalty and what could be the reasonable excuse.

Any help will be highly appreciated.

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