Taxpayer defeat for non-filing of SA return

Posted by nickhuber PM | on Fri, 17/02/2012 - 12:39 4444 3 comments

A recent tax tribunal case about an appeal against late-filing penalties appears to showed “muddled thinking” on the requirements of when to file a tax return, according to Smith & Williamson.

In the case (Julie Hawkins and the Commissioners for HM Revenue & Customs, TC01764), a woman appealed against a penalty of £200 for the late filing of her tax return for the 2008/9 tax year ending 5 April 2009 and for surcharges totalling £824.48 for non-payment 5 of the tax due.

Hawkins stopped being self-employed in January 2008. She became employed and started to pay tax through PAYE. She submitted a tax return for 2007/08 on 16 January 2009, notifying HMRC that she had ceased to be self-employed in January 2008.

Continued...

'The appellant was required

Stalytax | Mon, 20/02/2012 - 15:34 | Permalink

'The appellant was required to complete a tax return until she was notified to the contrary by HMRC.'

Is that correct? If she ceased to be self employed in 2007/8, told them so on her return and really received no notice to file for 2008/9, then I would have thought that, in the absence of psychic powers she behaved quite reasonably.

'The appellant was required'[

cameret | Tue, 21/02/2012 - 14:49 | Permalink

I agree with Stalytax that the judgement seems odd.

I had assumed that if HMRC were notified of a cessation date on a return, within the allowed time limits, but subsequently required a return for the following tax year, you could argue that the return was issued by mistake?

I successfully appealed against fines for a partnership on the basis that I had submitted an emended assessment advising HMRC of a cessation prior to 5th April 2009, even though they had issued a requirement to return for the following tax year on 6 th April 2009. My appeal was simply on the basis that I had advised them of a cessation, and that the issue of a subsequent return was therefore a mistake on their part.

It raises the general question of whether HMRC can issue an assessment, with no evidence that the taxpayer might need to complete one, within the requirements of self assessment?

Just because you cease to be 1 thanks

Alan Ferris | Tue, 21/02/2012 - 16:50 | Permalink

Just because you cease to be self employed does not mean you would not be required to complete a Self Assessment return. Therefore it is irrelevant if the box is complete or not.