A new client has never fulfilled the self assessment criteria since 2008. However HMRC have been sending him Tax Returns. He has paid penalty determinations of around 3K for 2008-2010. Around 3.5K penalties for 2010 -2013 tax returns (which I have submitted now). I was wondering whether there would be a successful chance of getting the penalties back. Of course client should have actually filed returns rather than pay determination but we all know ignorance of law is not a reasonable excuse.
Can I appeal on (1st) ground that he didn't fit the criteria for filing a return along with the (2nd) ground of Donaldson & Morgan? Or would mentioning the two cases jeopardise the appeal on the first ground and get HMRC to chuck out a standard reply of "we are waiting for the outcome of the case".
Any thoughts appreciated.
Replies (6)
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Just need to ask
If he didn't fit the criteria for filing Self-Assessment Tax Returns, why did you file them?
I believe that you filing these returns has not helped his case for a successful appeal one bit.
As already said
I think since you have submitted the tax returns and the penalties have been paid it will be much harder to appeal. It might not be impossible though, so your best bet is just to write a letter to HMRC explaining the situation and hoping for the best - your grounds for appeal will be that your client should not have been asked to submit a tax return as they did not meet the criteria for having to submit.
No return, no penalties
Since the final penalties are determined by when the return is submitted, it is arguably true they cannot be appealed until then. However, if the return was cancelled entirely, there would be no penalties to appeal. There would be no need to appeal penalties at all if you had got HMRC to agree no returns were due.
So you now need to go with the uninformed taxpayer argument. This should focus on their BELIEF that they did not need to submit returns, even though HMRC had requested them. The point that, based on their income, no returns were actually required anyway (so their belief was not unreasonable) should be made in support of this claim.
Do you know why?
If the situation was the same for those years, it makes no sense for them to do this. Did they give any reason for insisting on having these years? If not, an appeal based on the fact they should have been cancelled as well, and were only submitted at all on HMRC's insistence, would seem a good angle. They stuck to their guns about the returns 2012 onwards.