Out of time Nil Income Tax Returns
I've been helping a neighbour who hasn't earned income for years to get her affairs in order. She had a stack of returns which hadn't been sent back so managed to file everything online by 31 January except for y/e 5/4/06 and 5/4/07 which she delivered personally to the HMRC office on 1 February 2012. These are all completely nil returns and she told HMRC back in 2003, 4 and 5 what her situation was and that her husband was declaring anything that was joint on his returns.
She has not had a statement from HMRC this month but checked her online SA account and it showed first and second penalties for both 06 and 07 of £100 each (ie only the first two six monthly penalties for those years and everything since reversed) plus interest. On querying it by phone she was told these hadn't been 'waived' like the others and were due for payment. She has paid it over the phone but I'm somewhat puzzled by the explanation she thinks she's been given - 'out of time' returns penalties being payable even if there is no tax due.
Your help would very much be appreciated.
Thankyou, Anthony, I'll
Thankyou, Anthony, I'll suggest she does that and let you know the outcome.
"Joint Income" 1 thanks
"and she told HMRC back in 2003, 4 and 5 what her situation was and that her husband was declaring anything that was joint on his returns."
So her returns are not correct. If she has interest on joint bank accounts with tax deducted she could be getting a refund.
Also we had a case where the husband inadvertantly told us an account was his when in fact it was a joint account. HMRC picked this up from a bank return and his wife ended up with an Aspect Enquiry.
Moral of the story? Beware of making "convenient" decisons on returning taxable income. They can return to haunt you.
Sorry, yes, I should have
Sorry, yes, I should have been more precise. I did point out their savings arrangements haven't been very tax efficient because her husband is a higher rate tax payer and he operated the savings and main bank accounts in his name alone and the joint account earned a few pence.
Out of time returns and penalties 1 thanks
Normally HMRC say that the return is out of time but accept that if no tax is due the penalty is reduced.
She should try writing in to say that she has sent in returns for these years showing no tax due and, although she appreciates that they are out of time, she understands that HMRC will nonetheless reduce late filing penalties.