Late filing penalty for personal tax return. Reasonable excuse

Late filing penalty for personal tax return....

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Hello,

Couple of my clients received late filing penalties of £1200 and £1500. Both are working through limited companies and do not recall registering as self employed with HMRC. Both have changed addresses long time ago and most possibly HMRC was sending letters to old addresses. 

My question is: Can this be used as a reasonable excuse in appeal against the penalties?

Replies (12)

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By DP Walsh
17th Sep 2014 13:44

If your clients were company directors they would most likely have been sent a request by HMRC to complete a tax return. It depends if they informed HMRC of the changes of address whether an appeal will be successful.

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Replying to johnhemming:
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By accountsdirect
17th Sep 2014 14:07

I do understand that a director of a limited company needs to do personal tax return. However, when we register clients for personal tax return, HMRC would simply send a UTR number and issue tax returns with a deadline of 3 months to complete instead of sending penalty notification. It is more likely that HMRC issued them a UTR number for personal tax at some stage. 

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By Alan Ferris
17th Sep 2014 13:49

How then

Have they received a late filing penalty notice if they are sending the letters to the wrong address?  Self Assessment returns are not only for the self employed.

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Replying to tedbuck:
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By accountsdirect
17th Sep 2014 14:09

They received penalty letters when we tried to request UTR numbers for personal tax return. The HMRC sent a letter mentioning that they were already registered for personal tax. HMRC does not automatically register company directors for personal tax return.

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By Paul Hawes
17th Sep 2014 14:14

If requested

If a request was sent out to complete a tax return then they would be in the system as to complete a tax return. If your clients had NO reason to complete a tax return and the requests were sent to the wrong address then I don't see why HMRC wouldn't accept an appeal against the penalties.

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Replying to SimonStone:
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By accountsdirect
17th Sep 2014 14:17

They had a reason to complete personal tax return- Being the director of a limited company but without knowing that a UTR number was issued.

 

I shall appeal and see what happens.

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By The Innkeeper
17th Sep 2014 14:23

@accountsdirect

This has been flogged to death here - being a Company Director does NOT impose a statutory duty to file a Tax Return in spite of what HMRC seem to think

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Replying to paulinleeds:
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By Alan Ferris
19th Sep 2014 08:20

But

The Innkeeper wrote:

This has been flogged to death here - being a Company Director does NOT impose a statutory duty to file a Tax Return in spite of what HMRC seem to think

 

Yes, but if a notice to file has been issued then they do.  I would appeal any late registration penalty where I did not beleive they had any reason to register other than being a director, but if a notice to file has been issued then the legislation is clear, you must file, even a nil return.

 

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By cbp99
17th Sep 2014 14:54

.

Are these clients related - ie at the same address, or are they coincidental instances of clients moving, not telling HMRC of their move, and not being aware of a requirement to file?

Am puzzled how they received penalty notices but not requests to file.

Am also puzzled by the amount of the penalties. Assuming no return for 12-13 has been submitted, I would expect the current penalty to be £1,300 each (although the latest notice may only mention £1,200, an earlier notice having been sent for the initial £100 penalty).

As has been said, there is no requirement for SA by virtue of being a director, unless HMRC request one. In my modest experience, HMRC rarely request SAs for new directors.

To answer your actual question - I don't know, but you would need to gather evidence of how they became registered for SA and other aspects of the history.

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Replying to adam.arca:
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By accountsdirect
17th Sep 2014 16:30

The clients are not relative. We actually requested a UTR number for them as both have dividends entering higher tax band.

I agree that further evidence needs to be gathered to find out how did they already have UTR numbers. 

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RLI
By lionofludesch
19th Sep 2014 08:43

How much ?

It would strengthen your case if there was no tax to pay on these self assessment returns.

If they owe thousands, I think you're doomed to failure.

But appeal anyway.  Find out why HMRC issued the returns - was it just because the taxpayers had become directors or was there something else ?

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By Vaughan Blake1
19th Sep 2014 09:16

64-8?

If you have one in play for these clients take a look on the gateway and see how many year's tax returns have been issued (and when).  Also stops this happening again.

Always worth an appeal if there is a smidgeon of an excuse.

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