HMRC Penalties - are they enforceable?

HMRC Penalties - are they enforceable?

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Hi, a client had a self assessment submitted late and has accrued penalties of £1200 plus some interest. The tax return has been submitted and the tax liability has been paid bit the penalties remain.

The client in question has asked me if HMRC have the powers to enforce the payment of a penalty? They are of course adding interest but could they send bailiffs, threaten bankruptcy etc for the outstanding penalties?

Replies (70)

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By duncanedwards
20th Aug 2014 23:22

Not sure ...
but I assume, even absent special rules, the amount could be recovered by legal action. No-one would pay voluntary penalty, would they?

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By new2accts
20th Aug 2014 23:26

Yes
They will escalate it. I've had clients have bailiffs. Recommend you try to Appeal penalties and if unsuccessful tell client to arrange repayment scheme at the very least if they can't pay off in full As this will stop further action and costs. But tell clients interest and pens will accrue even with payment plan.

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Replying to Novakova:
Wild Billy Hickok
By Wild Billy
20th Aug 2014 23:35

Oh dear

new2accts wrote:
Recommend you try to Appeal penalties

Why? Why would you automatically recommend that? Wouldn't you first be establishing whether there was a reasonable excuse to merit an appeal? Just going for an appeal for some spurious reason when the client should just accept it only jams up the system for everyone else.

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By User deleted
21st Aug 2014 00:03

Exactly ...

... and if you go to first tier you have years to wait so well worth doing.

Every one should appeal at every opportunity, the penalty regime is unjust and disproportionate, if every penalty was appealed and taken to first tier the system would fall apart and then may be someone with a brain would look at it and make it fair and proportionate.

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Replying to atleastisoundknowledgable...:
Wild Billy Hickok
By Wild Billy
21st Aug 2014 00:24

Disgrace

Old Greying Accountant wrote:

... and if you go to first tier you have years to wait so well worth doing.

Every one should appeal at every opportunity, the penalty regime is unjust and disproportionate, if every penalty was appealed and taken to first tier the system would fall apart and then may be someone with a brain would look at it and make it fair and proportionate.

Marvelous. Just marvelous. Thanks on behalf of my clients who do have real cause to go to the tribunal. If we willingly f*** up the system then I don't think we should complain about it or HMRC's attitude to us. 

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Replying to alan.kennedy.smithkennedy:
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By chatman
22nd Aug 2014 23:16

Error?

Wild Billy wrote:
on behalf of my clients who do have real cause to go to the tribunal

Is it only me who thought Wild Billy was HMRC?

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By User deleted
21st Aug 2014 10:21

It is the system ...

... that is the disgrace, HMRC or the Government won't listen and abuse their powers - we have no other choice.

Why should a late tax return with no tax due incur a £1200 fine, but an on time return with deliberately understated tax would only be fined up to 100% of the tax due.

A fair system would be higher of £100 or a %age of the tax due, on a sliding scale depending how late, but no more than 10%, although I would argue the old system of lesser of £100 or tax due was fair because if the tax is late there is a surcharge, and if the tax is paid but the return late what is the problem, I had clients who due to how busy they were couldn't get the accounts done in time so paid a high estimate of the tax bill expected to avoid a fine.

Anyway, what's the problem, if you have genuine grounds the penalty is held pending appeal, if you know it will succeed does it matter if it takes one month or twelve?

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Replying to PitiBev:
Wild Billy Hickok
By Wild Billy
21st Aug 2014 07:15

No, that isn't the only choice.

Old Greying Accountant wrote:

... that is the disgrace, HMRC or the Government won't listen and abuse their powers - we have no other choice.

Why should a late tax return with no tax due incur a £1200 fine, but an on time return with deliberately understated tax would only be fined up to 100% of the tax due.

No, that isn't the only choice. 

Old Greying Accountant wrote:

Anyway, what's the problem, if you have genuine grounds the penalty is held pending appeal, if you know it will succeed does it matter if it takes one month or twelve?

Of course it matters. Rather a lot in my opinion because those with genuine grounds- those who have done nothing wrong- should not be made to wait for long periods before having an issue resolved; it hangs over them, worries them, and any sensible planning means you have to make a contingency to pay that bill in the event that appeal is not successful. I don't simply assume because a client has genuine grounds in my opinion that it can be simply assumed the appeal will be upheld. I am not that arrogant. And the more baseless appeals put forward, the more likely HMRC is going to be approach ALL cases with a more sceptical and suspicious attitude, which doesn't help me either. It also means resources are no doubt diverted into areas that could more usefully deployed elsewhere, such as more experienced people on the end of a telephone....

Your response is rather telling though isn't it? Accountants complain about the very system they are undermining themselves. Well played sir, well played. 

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Chris M
By mr. mischief
21st Aug 2014 07:37

Personally I have never considered striking for any reason in any job, going back to my first one in 1983.

But if accountants nationally were to decide we would not enter anything into the HMRC database until HMRC actually started to listen properly to us, I would be up for that.

Old Greying is right.  Whilst I don't appeal no-hopers, I appeal everything else.  The penalty system has got completely out of hand, and with RTI fines coming in November it will get even worse soon.  Meanwhile HMRC completely take the piiss with their ever worse service levels, silly voice mail systems and so on.

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By ShirleyM
21st Aug 2014 07:44

Who pays?

If you appeal against everything to 'clog up the system', do you do this work pro-bono, or are you charging the client for your personal crusade?

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By User deleted
21st Aug 2014 09:03

And what about HMRC ...

... clogging up my systems?

I probably spend at least 10% of my time dealing with spurious issues created by HMRC when they have had information and not dealt with it. I am currently dealing with all the demands for P11D's when the final FPS cleary showed none were due, or the hours spent trying to get PAYE/CIS refunds repaid or off-set.

If we can apply for statutory compensation for such matters I make take a softer line on penalties.

For the record I don't appeal no-hopers, I was just baiting a pompous prat.with my second post - if you read my first post I say appeal "at every opportunity", that is not the same as "everything" - may be too subtle a distinction for some!

I did go on to say "IF EVERY " penalty was appealed the system would fall apart, not the same as saying "I APPEAL EVERY PENALTY". This is an hypothesis, not a call to arms - again, may be too subtle for some.

Shirley, it takes about 2 minutes to lodge an appeal, and how many do you think I have? Don't know about your practice but if penalties hit double figures in a year I get a sense of failure? Generally the ones I get are not from hardened self employed people or shareholder/directors, but older people on pensions who owe less than £100, generally widows whose husbands always used to deal with the finances, usually the underpayment is due to coding [***] ups on their pensions, who don't understand it all and come to me distraught when they get a bill for hundreds of pounds in interest and penalties, and yes, I frequently appeal these for free because as a Christian I am not going to seek profit from others misfortunes for the sake of a few minutes of my time. Better to look at the big picture, as what goes around comes around, and it is funny how a small act of random kindness can lead to an A1 client after they have told a friend/neighbour/family member about the very nice man who helped them out!

Just think, what if it were your Mum or Dad stressed and distraught from the heavy high hand of HMRC?

Perhaps I will never be rich in monetary terms, but that is not the only way to measure wealth - I would rather have a clear conscience than a clear overdraft.

 

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Replying to Duggimon:
By ShirleyM
21st Aug 2014 09:52

No need for sarcasm!

Old Greying Accountant wrote:

.For the record I don't appeal no-hopers, I was just baiting a pompous prat.with my second post - if you read my first post I say appeal "at every opportunity", that is not the same as "everything" - may be too subtle a distinction for some!

'Every opportunity' could easily mean 'everything'. Don''t be rude just because you were vague in your wording.

I've really had enough of the bitterness and sarcasm on here. Everyone seems to be turning against each other, and it is infectious.

 

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By Roland195
21st Aug 2014 09:34

I'm with OGA

The penalty regime is unjust, disproportionate, illogical and unevenly applied. It is also getting worse every year as more & more opportunities arise for HMRC to create offences to which penalties apply.

I have little sympathy for the deliberate defaulters but they are not usually the ones caught out by this. The tradesman who registers as a contractor for a one off job with a subbie then doesn't realise he has to file the nil returns for the rest of the year ending up with £3k worth of penalties on not £0.01 of tax owed is more like it.

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Replying to Soletrader:
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By User deleted
21st Aug 2014 10:09

I would add ...

Roland195 wrote:

The penalty regime is unjust, disproportionate, illogical and unevenly applied. It is also getting worse every year as more & more opportunities arise for HMRC to create offences to which penalties apply.

I have little sympathy for the deliberate defaulters but they are not usually the ones caught out by this. The tradesman who registers as a contractor for a one off job with a subbie then doesn't realise he has to file the nil returns for the rest of the year ending up with £3k worth of penalties on not £0.01 of tax owed is more like it.

... there are many who do not even realise they have been registered as a contractor by HMRC, they phone up to get a PAYE scheme set up and because they are in the building trade HMRC set them up on a CIS scheme too and the first they know is when the penalty confetti starts sweeping in. I had one guy in that boat who had racked up £30k of penalties and had never had a single subbie, nor did he intend to. He like many had been forced in to self-employment following redundancy. He gave me a box of dozens of unopened penalty notices, demands, threats etc. etc.as they just scared the crap out of him. May be I shouldn't have appealed as he should have made the returns and it was his own stupid fault. How much HMRC time and resource did that little escapade divert away from genuine cases, not to mention the cost to my client for me to sort it out.

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Replying to Problematic:
Stepurhan
By stepurhan
21st Aug 2014 10:49

Client blame

Old Greying Accountant wrote:
... there are many who do not even realise they have been registered as a contractor by HMRC
...which would be a reasonable argument for a first penalty. If he never intended to employ subcontractors, then it is unfair to penalise him for failing to submit a return he never knew he had to do. However.
Quote:
He gave me a box of dozens of unopened penalty notices, demands, threats etc. etc.as they just scared the crap out of him.
You talked about the £30k of penalties as if they had just appeared out of the blue. They did not. HMRC had sent him many notices that alerted him to the position, but he didn't do anything about them. At that point, he became responsible for the problem. I can accept the original fault may have been on HMRC side (though do you have evidence he didn't set up a CIS scheme, albeit without realising the consequences of doing so) but he had many opportunities to correct the error well in advance of penalties reaching this level. The uninformed, unrepresented taxpayer argument can be taken too far. Just ignoring a problem in the hope that it will go away was his own stupid fault. It is not entirely unreasonable for any organisation to adopt a more threatening tone when repeated contact is ignored.

Incidentally, I also read "every opportunity" as you appealing everything. This is not an unreasonable interpretation, as every penalty provides an opportunity for appealing said penalty. You need to either be clearer up-front or accept that your language was ambiguous. Your hectoring tone just makes it more likely that even your reasonable arguments will be dismissed out of hand.

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Me!
By nigelburge
21st Aug 2014 09:56

On topic

If the penalties include daily penalties, then appeal against these NOW.

They may well be unenforceable due to a long awaited Tribunal decision.

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Time for change
By Time for change
21st Aug 2014 10:11

Yes, it's been a hot summer and my goodness,

I've also noticed a more "heated" atmosphere on here and agree with ShirleyM, when she comments;-

I've really had enough of the bitterness and sarcasm on here. Everyone seems to be turning against each other, and it is infectious.

It reminds me of, not so long ago, when it was the norm for the moderators to regularly remove threads which quickly went downhill.

We're all of an age where we should be able to; listen to different opinions, either comment fairly or, not at all and, move on! Is this how some of you talk/deal with people who pay you?

 

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Replying to Problematic:
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By User deleted
21st Aug 2014 11:45

Pots and Kettle though ....

Time for change wrote:

I've also noticed a more "heated" atmosphere on here and agree with ShirleyM, when she comments;-

I've really had enough of the bitterness and sarcasm on here. Everyone seems to be turning against each other, and it is infectious.

It reminds me of, not so long ago, when it was the norm for the moderators to regularly remove threads which quickly went downhill.

We're all of an age where we should be able to; listen to different opinions, either comment fairly or, not at all and, move on! Is this how some of you talk/deal with people who pay you?

 

... although they will deny it, many on here have a habit of jumping on band wagons and then getting all righteous if the worm turns.

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By new2accts
21st Aug 2014 10:21

Appeals
Yes I don't appeal everything either but when there is a reasonable justification I do, sometimes the clients have got to take it and pay it when it's their own fault as they do get lots of reminders, that's why if they are struggling to pay they should at least make a repayment arrangement themselves so it doesn't get passed across to bailiffs

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By User deleted
21st Aug 2014 10:47

My comments were ...

... more an expression of sorrow, I have no bitterness, not my fault I don't come from God's own country, where a spade is a spade is a spade. Things are not so beautifully clear cut elsewhere.

We are accountants, our professional lives are based on splitting hairs and duality of meaning, As such we read things several times, examine from all angles and seek further informaton if doubt exists to meaning. We are trained to enquire and delve, not to take things at face value, but I think my comments were clear and was somewhat saddened rather than bitter that I had to clarify what I took as obvious to my peers.

I would argue my comment was more patronising that sarcastic though.

I would still say though, seeing as penalies generally arrive with less than a week to go before the appeal period elapses (frequently not until after) to fail to make a protective appeal would be opening oneself for negligence claims. They can always be withdrawn, and a decision to go to first tier can then be made in a more considered manner.

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Replying to bernard michael:
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By User deleted
21st Aug 2014 12:47

O captain my captain!

Old Greying Accountant wrote:

We are accountants, our professional lives are based on splitting hairs and duality of meaning, As such we read things several times, examine from all angles and seek further informaton if doubt exists to meaning. We are trained to enquire and delve, not to take things at face value.

 

*Hear's an army drum roll in the background and salutes to the Union Jack*

I can imagine this being said by Lt. Accountant before he leads us into battle with the solicitors.

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By User deleted
25th Aug 2014 16:51

Nothing wrong ...

... with heated debate, and if everyone agreed with each other life would be pretty dull. Some though seem to take things too seriously, and personally.

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By Vaughan Blake1
21st Aug 2014 11:41

Yes they can

In answer to the OP.  Hopefully, with your input HMRC won't and some sort of payment plan can be agreed.

To appeal or not is another matter.  I only need a hint of a good reason to lodge an appeal.  Basically, anything other than 'He couldn't be arsed' is worth a try.  The stumbling block often is that the 'good reason' has to cover the total period of the default.  Yes, your granny may have died on 28 January causing late submission, but if you didn't submit the return until June.....

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By User deleted
21st Aug 2014 11:43

Yes but ...

... there are many, especially amongst the trade that do hide from things because they are stressed, frightened and do not have the capability to understand. We are educated trained professionals, it is especially the case where someone who is of an employe mindset doesn't really have the capability to run a business but have to else they cannot make ends meet.

People do not always act rationally, and I think with CIS, ithe system is madness, it is like the sorcerors apprentice and the buckets of water - one return one brown envelope, two returns two brown envelopes until soon you are getting a brown envelope a day demanding more and more money. It is entirely understanadable that you will hide them and not open them - the system borders on mental cruelty with its relentless grinding away at people.

Stupidity is not a crime, nor is ignorance - some people do not have the ability to deal with officialdom and bureaucracy - what they should do has no relation to what they can do. If HMRC have been sending out answered penalties for 2 or three years, should they not send someone round to see what the problem is. There is now little opportunity for tax payers to see someone who can help them with things. It is not entirely unreasonable for a threatening state organisation to adopt a more tolerant tone when repeated contact is ignored, and to try and find out why, and by providing local persoanl contact centres so the isue can be explored and resolved. I don't think you can liken HMRC to a utility company chasing an unpaid gas bill, it does have some responsibility to engage with tax payers. If they can send in the bailiffs can they not send someone to find out why tax is not being paid first?

As for whether people listen to my arguments or not, you too make an assumption - in that I care. As for hectoring tones, He started it, nah nah ne nah nah :o) - childish, probably, but I only responded in kind - I reserve the right to retaliate if provoked and make no apologies.

 

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By User deleted
21st Aug 2014 12:02

incidently ...

... of those I have appealled, 100% have been over turned, and only one had to go to first tier.

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Replying to Soletrader:
By ShirleyM
25th Aug 2014 08:06

But there is a way to get fair treatment

Old Greying Accountant wrote:

... of those I have appealled, 100% have been over turned, and only one had to go to first tier.

You can appeal and based on those stats, OGA .... you are a Superhero.

If it was HMRC policy to automatically disregard penalties caused by incompetence, then I can imagine everyone would plead incompetence. The appeal process is there for a reason, ie. to help those who had a genuine reason for late submission, and weed out those who use any old excuse. It may not be perfect, but  then, what is?

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By Democratus
21st Aug 2014 12:03

in summary

the old American adage seems to apply...

Don't hate the player, hate the game.

 

HMRC are unique in that they are both a player and a rule setter. Often they use sledgehammers to crack nuts. I can't say that I would blame any professional for lodging protective appeals, or indeed trivial or vexatious ones if HMRC were irresponsibly failing to properly do their job correctly 1st. 

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By Vaughan Blake1
21st Aug 2014 12:21

I wonder OGA...

If your client with the unopened official letters had fully complied with all the other official stuff that goes with running a construction business and employing people?

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By User deleted
21st Aug 2014 12:41

@ Vaughan ...

... he didn't employ anyone, he installed bathrooms for disabled people as a sub-contractor - he was effectively employed  but as is common was forced to work as a subbie to get any income so the "employer" could avoid NICs, holiday and sick pay etc.

I get the impression when he registered as a subbie he got signed up for everything else too

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By User deleted
21st Aug 2014 12:57

No ...

... that's the speech before the audit swat team go in.

And it would be General OGA, heaven forbid I was anywhere near the front line.

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By dnicholson
21st Aug 2014 13:23

Really?
OGA said:

"... with heated debate, and if everyone agreed with each other life would be pretty dull. Some though seem to take things too seriously, and personally."

So what did your post of 10th June mean:

"... seriously P****D OFF with HMRC.

What other organisation would keep you on the phone with a load ot trite [***] spiel for 5 minutes, put you through 3 menu's, then say F**K off and hang up?

That is not what they actually said, but as good as!"

https://www.accountingweb.co.uk/anyanswers/question/ffs

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Replying to DJKL:
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By User deleted
21st Aug 2014 15:57

Anyone with half a brain ...

dnicholson wrote:

OGA said: "... with heated debate, and if everyone agreed with each other life would be pretty dull. Some though seem to take things too seriously, and personally."

So what did your post of 10th June mean:

"... seriously P****D OFF with HMRC. What other organisation would keep you on the phone with a load ot trite [***] spiel for 5 minutes, put you through 3 menu's, then say F**K off and hang up? That is not what they actually said, but as good as!"

https://www.accountingweb.co.uk/anyanswers/question/ffs

... would realise that was having a quick rant to let off steam, and inject a bit of humour in the day.

I really find it worrying though that someone would a) be [***] enough to dredge up a two month old post and b) make the correlation you have between the two posts - I will be laughing at this all afternoon - glad I have a life, you should try it sometime as it seems you are the one who takes things seriously and personally, don't work for HMRC peut-être?

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Jennifer Adams
By Jennifer Adams
21st Aug 2014 13:44

This is exactly what Donaldson v HMRC is about...

As nigelburge points out - this is the subject of a court case.

We have been waiting for the result of this court case for a few weeks now (see the Any Answers comment link as below) - it was listed to be heard at the beginning of July.

https://www.accountingweb.co.uk/anyanswers/question/donaldson-v-hmrc-result

The £1200 you refer to includes the Late Daily Penalty charge which Morgan v HMRC and Donaldson v HMRC is all about.

Suggest appeal against the penalties as Donaldson is trying to say they are unlawful.

You'll get standard letter back saying that they have registered your appeal but the penalties are still due.

If Donaldson wins then you'll get the money back plus interest - if not the payment will still be due.

And meanwhile the penalties are enforceable.

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Replying to fawltybasil2575:
Me!
By nigelburge
21st Aug 2014 14:16

Yes but....

JAADAMS wrote:

And meanwhile the penalties are enforceable.

My experience has been that HMRC is suspending collection until the outcome of the case is known.

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By dnicholson
21st Aug 2014 17:49

Easy to find
Well there's are posting guidelines for this forum which your post clearly breached, so it became the subject of the only email I have ever sent to AccountingWeb. So it took 5 seconds to find it.

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By User deleted
21st Aug 2014 20:10

Oh dear ..

... how sad, never mind - as Sgt Major Williams would have said.

Doesn't explain the hypocrisy of breaching the rules yourself by reposting something you found so vile and offensive, and which has absolutely no relevance to this thread other than by some perverted contrivance! 

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By User deleted
23rd Aug 2014 07:10

Error?

Well I assumed that Wild Billy was a decent accountant who believed that some penalties are justified and that if everyone appeals every single penalty just for the hell of it then it buggers up the system for those whose penalties aren't justified.

After all, if you have a limited number of staff at HMRC and double their workload then it's a reasonable assumption that it's going to take twice as long to get through it (a longer wait) and increase the risk of error because they're going to be under pressure to get through it. How does that help anyone?

 

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By ShirleyM
23rd Aug 2014 08:04

Agreed

If people would only take notice of the numerous reminders, some of which contain details of the penalties that will be imposed, then things would improve for everyone. 

I find it difficult to be sympathetic when we send numerous reminders (the later ones have penalty info), in addition to those sent by HMRC, only to be ignored. There are few excuses that genuinely prevent them from submitting returns for months on end. The penalties are avoidable.

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By User deleted
25th Aug 2014 16:52

So tell me ...

... what is just, ethical and proportional about an employed individual with just salary (which has not changed for 7 years), car and healthcare, all properly returned by the employer, owing £3200, comprised £500 tax, £2700 penalties? That is 540% penalty, the highest penalty for deliberate under-declaration is only 100%!

Yes people should do things but don't for many reasons, and Flash you should know better than anyone, to some people letters from HMRC induce a similar reaction to you at a party with hundreds of people.

I don't say there shouldn't be penaties for non-compliance, but they should have the three attributes above. We should all drive at or below the speed limit, not park on yellow lines etc. If we get caught we accept a fine, but one that is relative to the trangression. You would expect to get fines at lot more for driving 30mph over the limit than you would 5mph over, so why should a tax return with £100 tax due get the same penalty for being late as one with £100,000? It is in any case double jeopardy, as there is a surcharge on the late tax too.

So, I don't think I will appeal then, the stupid idiot deserves to starve and freeze and sit in the dark because he gets in a blind panic and sticks his head in the sand when he gets a letter from HMRC!

 

 

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By User deleted
24th Aug 2014 00:32

Telling you

To rack up £2700 penalties he's ignored a lot of letters. If I was in that much of a blind panic about it I'd be pretty desperately looking for a solution, not just standing there at the party in a mindf**k trying to pretend I was somewhere else. If I'm getting stressed about something there's part of my brain going 'okay, what's the problem, identify it and come up with some solutions'. He could have asked a accountant for help, could have rung HMRC, could have asked a relative or friend for advice....

And I'm missing Miami playing so life's too short.

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Replying to GHarr497688:
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By User deleted
25th Aug 2014 16:54

Careful Flash ...

Flash Gordon wrote:

To rack up £2700 penalties he's ignored a lot of letters. If I was in that much of a blind panic about it I'd be pretty desperately looking for a solution, not just standing there at the party in a mindf**k trying to pretend I was somewhere else. If I'm getting stressed about something there's part of my brain going 'okay, what's the problem, identify it and come up with some solutions'. He could have asked a accountant for help, could have rung HMRC, could have asked a relative or friend for advice....

And I'm missing Miami playing so life's too short.

... you may get reported, self censorship with *'s is against the rules don't you know, you may offend someone :o)

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Replying to RobJohn1989:
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By chatman
25th Aug 2014 17:10

Self-censorship

Old Greying Accountant wrote:

... you may get reported, self censorship with *'s is against the rules don't you know, you may offend someone :o)

That rule is only enforced when the moderator is looking for an excuse to delete your comments but hasn't got anything else.

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By User deleted
24th Aug 2014 23:28

Agreed ...

.... he's stupid , but still doesn't justify the penalties, and it doesn't take that long or that many letters to rack up penalties when you get on daily penalties.

Also, why should some owed, for one of the years, a £0 refund, who is on PAYE and (not unreasonably) expects his tax to be sorted at source have to fork out for an accountant.

At least when there were local tax offices you could go and talk to someone easily.

Some people, especially at the blue collar end of the scale cannot deal with these things, and frankly shouldn't have to. HMRC have all the information from the employer and the bank.

It is ridiculous in this day and age that they can't send a simple pre-completed form listing income and benefits for the tax payer to sign as complete, or add any additional income as necessary.

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By chatman
24th Aug 2014 11:30

Not Fair to Penalise Incompetence

I absolutely agree with everything OGA has said. Some people are terrified of having to read official letters and deal with forms and correspondence, and they end up not doing it. It is fine for those lucky enough to have the background to enable them to do so, but why penalise the others, especially when HMRC has most, if not all, of the information already?

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By User deleted
24th Aug 2014 17:27

Who said life was fair?

Actions have consequences. So do inactions. Not just with HMRC but everywhere in life. Life isn't supposed to be fair. You have to face things you don't like (or are terrified of) and either do them anyway or find a solution that works for you. Unfortunately if your solution involves putting your head in the sand then you have to be aware that something fairly [***] could get you anyway, in this case penalties.

I want faster broadband so I can watch the NFL on my pc without it buffering and me missing parts of the game. But to get that involves a BT engineer coming round - something that I detest with a passion - I've avoided it for ages because I couldn't face it. But by avoiding it I had to endure having games spoiled at crucial moments (the equivalent of a fine). So I've bitten the bullet and endured not just one engineer's visit but two (fault on the line) with a third this coming week and just for good measure I've struggled with a call to their call centre (I hate calls at the best of times and even more so when I can't tell what the bloke is saying most of the time and he's following his script so isn't even addressing my issues). I could say that it's fine for those lucky enough to be okay with having complete strangers turning up, but why penalise me by forcing me to endure slower broadband (and multiple engineer visits), especially when BT has the technology already to speed it up?

 

 

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Replying to thomas34:
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By chatman
24th Aug 2014 19:41

Can't we even try to make life fair?

Flash Gordon wrote:
Life isn't supposed to be fair

This statement presupposes an intention. Whose intention is it that life not be fair? Certainly not mine. Surely society is supposed to be fair; that's what I always vote for anyway (unsuccessfully up to now).

I am glad you managed to sort out your American sport issue Flash, but why does that mean other people should have to suffer for their weaknesses?

I think it is unfair that my time is wasted when, for example, an old woman falls over in the street and I have to help her up, but I don't ask why I should be penalised due to her clumsiness.

When I was a student and had no money, I had cancer, and I am very pleased that sufficient numbers of the UK electorate felt they were happy to be penalised by the tax system for the drain my sickliness put on the nation's finances.

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By User deleted
24th Aug 2014 23:35

It doesn't have to be fair ...

... but it needn't be unfair either!

There are enough things in life without the government that is supposed to represent the people and look out for the less advantaged making life hell for some with small minded unecesar bureaucracy.

Unfortunately we cannot all be superheroes, we don't all have IQ's over 100, we are not all able to confront and beat our demons. I think there are even some who, heaven forbid, are so stupid they can't even read!

I must be stupid as well as I thought one of the traits of a civilised society was that it was compassionate and helped the weak, not left them behind.

 

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Stepurhan
By stepurhan
25th Aug 2014 09:41

Workable penalty system

The penalty system is supposed to be a means of encouraging people to fulfill their obligations under tax law. If there was no penalty for failing to fulfill those obligations, there are some who would carry on blithely flouting them. Making that failure more painful than complying is the only way of getting some people to take action. It's not like HMRC has the choice of not giving people their custom like any other business. It is unfair on those who do fulfill their obligations if others are allowed not to.

So how can you distinguish those who refuse to comply, from those who have simply been stupid. The answer is, for the system to be workable at all, you can't. Someone claiming incompetence and someone actually incompetent are indistinguishable. Proving which it is, for all practical purposes, impossible.

But, as I said before, you have to have been serially stupid to get to the sort of level of penalties we are now discussing. Citing Flash's personal circumstances is not an appropriate comparison. The only way it would be is if taxpayers had no choice but to deal with HMRC themselves. They don't, they can contact an accountant or other professional to assist them. If they have no money, then there is the Citizen's Advice Bureau. The fact is, there are plenty of places of ways for someone scared of HMRC letters to get someone else to deal with them. To not do so is more than just not facing up to fear. After the first couple of letters, it will be quite clear to anyone that this is not a problem that will go away if you ignore it.

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Replying to Matrix:
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By User deleted
25th Aug 2014 16:49

I am not saying no penalty ...

stepurhan wrote:

The penalty system is supposed to be a means of encouraging people to fulfill their obligations under tax law. If there was no penalty for failing to fulfill those obligations, there are some who would carry on blithely flouting them. Making that failure more painful than complying is the only way of getting some people to take action. It's not like HMRC has the choice of not giving people their custom like any other business. It is unfair on those who do fulfill their obligations if others are allowed not to.

So how can you distinguish those who refuse to comply, from those who have simply been stupid. The answer is, for the system to be workable at all, you can't. Someone claiming incompetence and someone actually incompetent are indistinguishable. Proving which it is, for all practical purposes, impossible.

But, as I said before, you have to have been serially stupid to get to the sort of level of penalties we are now discussing. Citing Flash's personal circumstances is not an appropriate comparison. The only way it would be is if taxpayers had no choice but to deal with HMRC themselves. They don't, they can contact an accountant or other professional to assist them. If they have no money, then there is the Citizen's Advice Bureau. The fact is, there are plenty of places of ways for someone scared of HMRC letters to get someone else to deal with them. To not do so is more than just not facing up to fear. After the first couple of letters, it will be quite clear to anyone that this is not a problem that will go away if you ignore it.

... just a proportionate one, even if the penalty were the greater of £100 or 10% of tax due (even 100% same as deliberate underdeclaration) I would have n problem, or even if there were a reduction system based on the facts (ability of tax payer, co-operation etc as in an enquiry) - the late tax penatly was reduced to the minimum possible, there should be similar flexibility for late filing penalties. I would even be happy with a system like P11D's or CIS, £100 per month, but when daily penalties kick in, even if the tax payer goes straight to an accountant, they will likely clock up £200 or £300 penalities by the time the returns are prepared, approved and submitted. It shows the governments priorities when the maximum fine for using a hand-held phone when driving, or travelling a 45mph in a 30mph zone is £1000 but will usually be a fixed penalty of £100, but a late tax return can incur a fine of £1300. Shows that petty bureaucracy is far more important than endangering lives! 

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By User deleted
25th Aug 2014 10:01

The point is ...
... someone on PAYE should have a different penalty regime to someone who is self-employed!
In 99% of cases hmrc have all the information and a tax return is a meaningless waste of time for all concerned.
Unless it can be shown the tax payer had other undisclosed income there should be a lesser scale of penalties for PAYE tax payers.
But yes, there are many serially stupid people out there else wonga and the like would not exist!
On the scale of the penalties, I think hmrc requested a number of returns at the same time so the penalties racked up in a very short space of time!

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