January UTR trouble: What to do
Clients without unique tax reference (UTR) numbers are a bane at this time of year, and create a new complication for advisers getting their heads around the new automatic late-filing penalty regime. Tax editor Rebecca Benneyworth picked up some of the issues in her online Q&A clinic for Sage Taxation.
This is the first year there will be an automated £100 late filing penalty - even if there is no unpaid tax due - prompting several questions on Any Answers involving people who do not yet have a UTR and other concerns around the new penalty regime.
This issue also cropped up in the TaxCalc-sponsored SA support survey, where 5% of all support calls reported have been about UTR and client registration issues. This figure suggests there could potentially be a large number of new filers who get penalties because they should have notified HRMC earlier in the year.
Having alerted AccountingWEB to the issue, consultant practice editor Mark Lee pointed out in his recent article that was no mention of any prospective ‘failure to notify chargeability’ penalty in letters sent out to taxpayers who requested a UTR in January.
He added that if a late filing penalty is due, not warning taxpayers when sending out UTRs raised the issue of fairness.
Rebecca Benneyworth responded to the queries in her online taxation clinic for Sage Taxation users. She offered the following summary: “If the client has not notified HMRC by 5 October that they have untaxed income or additional tax due for 2010/11 they have a failure to notify offence. This would normally attract a penalty based on the tax outstanding on 31 January 2012, but this can be subject to a reduction for voluntary unprompted disclosure - which if done within 12 months of 5 October can be zero.
“If a tax return was issued before 31 October then it must be filed by 31 January 2012 or a penalty is due. If no tax return was issued by that date then the due date is three months after issue and no penalty can apply until after that date - whether filed on paper or online.
Continued...
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Onus on taxpayer
Surely the onus is on the taxpayer to file a SATR if they know (or should know) that tax is payable, so if they already have a UTR and don't file by the deadline (I believe it's 2nd Feb now due to the strikes) then there will be a late filing penalty even if no tax return was issued.
Can you "opt" for a late notification penalty instead (and then appeal) if you already have a UTR but it was issued for something else?
Incidentally, the helpdesks seem to be misleading people a bit over UTRs. I have one client (new owner/director) who needs a UTR to report £30 tax on his company car and the helpdesk said ignore it as it will be in his tax code. Trouble is he takes notional salary so it wouild never get paid under PAYE anyway. Plus he needs to report P11D expenses and claim them back (no dispensation yet).
Another was told he didn't need a UTR because he wasn't self-employed! I get the feeling helpdesk staff are only trained to understand tax as it applies to regular employees or the self-employed, not small limiteds.
Chris
That's a relief
Thanks Robert/Rebecca - I posted a query on this a couple of weeks back and don't think I got any response but (in a grateful plug for them) I did got some very helpful (unofficial) advice from IRIS staff.
They too suggested paying in advance using the NINO as a reference and I pulled down the DIY payslip from HMRC's website for that purpose.