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Excellent!
I'll quote the judges words on the above cases on my 2nd appeal on a P35 late filing penalty (recently posted under Any Answers).
Bridge Building Opportunity
There really is a great bridge building opportunity for HMRC here. If they were to announce that in future P35 & CIS penalties will be advised immediately a default occurs - saving the £400/£500 penalties generally issued for late P35 - It would earn much goodwill with advisors and tax payers alike.
The delayed penalty notifications are giving agent authorisations a run for their money as the biggest bone of contention with HMRC. By simply adjusting their computer systems to issue P35 penalties 1 day after default would lead to administrative savings by HMRC. The huge volume of appeals experienced each year would taper off sharply - most tax payers will curse but immediately pay £100 at £400 plus they are generally game for a fight.
Come on HMRC you keep telling us how keen you are to work together - why not make this simple change and earn much needed goodwill with agents?
Faster Payments
Not directly relevant - but it is as if HMRC deliberately makes it difficult to comply since the HMRC bank account does not accept payments under the banks' "Faster Payments" system of same day transfers. So if for any reason (sickness, forgetfulness etc.) we fail to make the payment to HMRC on the designated day in advance of the deadline we have to pay to make a CHAPS transfer rather than just use FP. There is no excuse for this - just HMRC trying to collect more penalties - and that should be against the law.
Ahhh... you mean "unjust
Ahhh... you mean "unjust enrichment"........
Banks and building societies are prevented from doing this by way of the Consumer Protection from unfair trading (CPUTR) regulations
Faster Payments
Is there any good reason why HMRC should not accept payment under the faster payment regime? Looking at the system it seems able to handle payments of up to £100,000, although different limits may be set for commercial customers - but can the explanation be to maximise the penalty receipts??? It seems like it.
Mixing penalties
Just to point out that there is possibly confusion here as this article is mixing up two different penalty regimes:
The part about BACs relates to Late payment and the refs to Leachman, HMD and Dudley are all Late filing. We are seeing some different issues raised in the tribunals although the reasonable excuse remains a defence.
First off, we are probably missing something vital, as is not odd that an officer would not mention penalties in March 2009 as the new regime Sch 56 FA 2009 did not kick off until 6 April 2010!
I do think that to get off because you did not realise that BACs payments took three days may seem pretty lame, although until one can consider the background and whole circumstances it is not possible to say, because I would guess that most employers pay staff using BACS and so they would know the clearing dates.
Virtual Tax Support for accountants: www.rossmartin.co.uk
Re: Mixing penalties
The issue is that had HMRC notified them on 20th May 2010 that their payment was late, they would have scheduled the BACS payment a few days earlier in future months and avoided all the subsequent penalties. They didn't and waited about a year before collecting what was by then a much higher penalty.
Attitude
The point that is being made by myself and others that is common with the filing penalties listed in the article is that HMRC is not interested in getting people to comply with deadlines (otherwise it would make it easier to do so and would warn people immediately they are in default rather than allowing the penalties to build up) - but rather it wants to maximise the penalties that it extorts for minor transgressions.
Not lame at All
NRM - I do think that to get off because you did not realise that BACs payments took three days may seem pretty lame
The vast majority of small employers and those using CIS subcontractors do not use BACS they are still paying by cheque or bank transfer. It appears that HMRC's demand for cleared funds on the due date coincided with THEIR choice to change bankers form the Bank of England to Santander - Why should taxpayers suffer interest and penalties as a result. The fact that HMRC have chosen to bolt the faster payment door indicates that this is simply yet another ruse to raise penalties. HMRC reputation will never improve until they start to act in better faith - but of course they don't really care - just rename Victim Support to Customer Service and they have served the public.
All banks will use faster payments from 2012
It appears that HMRC's demand for cleared funds on the due date coincided with THEIR choice to change bankers form the Bank of England to Santander - Why should taxpayers suffer interest and penalties as a result.
Ah that explains the issue, Santander are the worst bank when it comes to faster payments. Thankfully from the 1st of January 2012 this will no longer be an issue as all banks are forced from that date by the FSA to use faster payments for any amounts up to £100,000.
Faster payments
Surely the Govt wants the money as fast as possible so to reduce its debt.
I cant see any logic in joining a bank that does not offer faster banking. If it is cost then someone needs the sack for not doing all the maths.
Goverment borrowing costs must dwarf the savings.
In any case shoud not it all be with RBS - since we the taxpayer own over 60+%.
B of E cheques immediate.
THEIR choice to change bankers from the Bank of England to Santander.
ISTR that cheques via the HMRC BofE account were cleared immediately on the day of receipt.
There are loads of these cases in the system!
There is a precedent case (Dina Foods Ltd, UKFTT 709) which HMRC will be using as the cases reach the Tribunal. This does provide some balance against the Hok Ltd case.
One problem is that HMRC had previously allowed taxpayers to render payments late without sanction. This creates a perceived unfairness now that penalties are applied under Sch 56, FA 2009. The Tribunal has held that the rate of penalty is not disproportionate.
Further, many taxpayers are proceeding to Tribunal without professional representation, which leaves them at a further disadvantage.
Another error?
The new regime that came into force on 1 October is surely late filing for SA, so not the same as these cases.
Re: BACS well, I am not that hard, I concede that if you are unfamiliar with it then you might be late a couple of times however without knowing the details of a particular case then it is hard to play judge.
I heartily agree about the faster payments though. HMRC collects £400 billion and it wants to raise an extra £7 billion and it is charging absurd penalties, when it could just accept faster payments and...get paid faster, and then put all that on overnight depost (do you know I think I know a bank or two that just might want to borrow that too).
Please will someone pinch me!
I have made a summary of Dina Foods that is the other sort of habitual late payer.
Virtual Tax Support for accountants: www.rossmartin.co.uk
Faster Payments
HMRC state on their website "HMRC cannot accept electronic payments sent using the Faster Payment Service (FPS) " - this is untrue - HMRC chose not to accept Faster Payments. The account is with Citi - and they do accept Faster Payments into all of their other Sort codes - so it can only be because HMRC instructed them not to accept Faster Payments that this sort code will not accept them.
A blatant abuse of process by HMRC whose sole purpose can only be to maximise penalties.
making self-assessment payments of tax
Many of my clients dont have payslips so how do they know whether to make the payment to the Shipley or Cumbernauld a/c number as shown on HMRC website.
Yet again an easy system made more complex. Why oh why HMRC?
Lack of faster payments
This is one of the Treasury Select Committee to pick up and force some action to increase the efficiency of HMRC, me-thinks.
Surely the interest earned on getting paid faster would be more than the amount raised by penalties, especially given that penalties are "not meant to be a revenue raiser?"
[***]-up or conspiracy?
Nichola
I would guess that to implement would mean that that HMRC staff would have to work harder and faster.
However Pholcroft above has indicated that HMRC has until the end of the month to get its house in order. From that date all banks have to use faster payment service.