HMRC respond: Penalties for PAYE Returns filed online

From HMRC:

"Although returns are due by 19 May, penalty notices have been issued only where these have not been recorded on our systems at 28 May. So, if you know that your returns were sent in by 28 May 2007 we suggest that you do not contact HMRC about any penalty notice you have received nor formally appeal against the notice until we have issued our next update."

When I contacted them regarding such a notice by phone earlier this week, they stated that a written appeal was necessary!!!

http://www.hmrc.gov.uk/employers/2006penalties.htm

The above notice is to be found in Whats New 4 October. It's titled '2006' penalties under Stop Press at the moment, so we'll just have to assume that is a mistake too.

"New penalties are also being levied for late CIS monthly returns from 1st October. A similar glitch in CIS processing systems are an alarming prospect for the construction industry."

Shouldn't that date be 19th October?

Could someone please point me to where they say this.

I have a client with one of those £900 penalties from a previous year and I am arguing that if a penalty is £100 a month then a penalty notice should be issued each month. I have said that saving them up just shows how out of control HMRC's systems are and that leaving people unawares then whacking out a big fine is a "nice little earner" for them

This thread suggests they have a policy of saving them up so it would be useful to see the text of that.

I think most of us would have raised our eyebrows when this penalty first appeared. This banding presumes that an organisation with 1 employee has the administrative staff of an organisation with 50. If that were the case then that employee will be spending days every week doing admin only.

More likely is that that 1 employee is getting his / her hands dirty trying to make a profit. Therefore the smaller the firm, the more harsh the penalty is.

Given the penalty is discriminatory in this way, and that many of the penalties are wrong, it is galling of the Revenue to delay one minute, never mind 3 to 9 months before sending out notices.

HMRC clearly do not have the competance to be given such a power and the penalty should be altered to reflect this. I suggest the monthly penalties should only begin from the day the first notice is issued.

One of my clients received a penalty notice on the 3rd Oct for £400 for not filing his return. He rang up and was told there was no record. He contacted me wondering what was going on, I rang HMRC, giving the clients details and date I filed and was told there was no record, I had to follow the appeal process and produce "evidence" such as a submission receipt that I had filed. No mention was made of letters going out in error. Ironically I've received notice that I can claim the clients £150 for filing online!

David

Have you had any success at all in your correspondence with HMRC in this regard.

I was looking for some tactics or tips in such an instance in my question posted here :

http://www.accountingweb.co.uk/cgi-bin/item.cgi?id=173780&d=1031&h=1021&f=1026&dateformat=%25o%20%25B%20%25Y

Many thanks

.... and why should I expect anything - I expect the matter to drag on for months, but I won't give up.

Funnily enough, I just got a 2006/7 £400 penalty for another client and here is how I replied;

*************************

I refer to your £400 Penalty issued 24 September 2007

You have ignored my letter of 4 May 2007 (copy attached)

Please cancel the penalty and close this scheme.

*************************
The letter of 4 May read;

Please close this scheme

Mrs xxxxxxxxxx retired in 2005/6 and there have been no employees in 2006/7

*************************

Here is what I wrote today

I refer to your telephone call just now - I spoke to an un-named person and their supervisor (Mrs YYYYYY)

Mrs YYYYYY put the phone down on me.

I now attach copies of my letters of 4 May and 2 October 2007 and ask for the matter to be reviewed at a senior level before this becomes an official complaint.

My letter of 4 May was quite clear and I was entitled to expect that, if you phoned, it would be to confirm that the penalty had been cancelled. Instead I found myself being quizzed about “who the P14 would have been for”. I was even asked if it would have been for Mrs XXXX !!!! It was when I had the temerity to ask for the second time, in what circumstances the employer would fill in a P14 for herself, that the phone went down on me.

Your staff seem fixated that I filed a Nil P35 online without an accompanying P14 - who would the P14 have been for? (the only answer I could give was “Mr Nobody”). It is not my problem that the online service does not allow us to state that the number of P14s are zero (but to answer that not all P14s had been submitted would be to invite problems so “yes” is the only possible answer)

Please give your staff the appropriate training i.e. to use judgement and common sense, and to read letters which have been very clearly written.)

****************************

Aside from the rubbish that is the PAYE computer system, the staff are poorly trained. The other week I had the phone put down on me after I felt obliged to ask if the HMRC employee knew what the Tax Commissioners were !!!

I was proud to be a Tax Officer (Higher Grade) until 1984. These days the 'interface' with the public and accountants is a call centre somewhere in Britain staffed by people trained to fob you off, who cannot put you through to a 'caseworker'.

AND THE LESSON TO US?
Turn their stupidity against them in your clients' interests. Document their idiocy - as I did with the letter I wrote today. When it comes to a Commissioners Meeting either someone is going to drop the case, or the Commissioners will side with you

HMRC have posted the following update on their website, explaining that the problem mostly affected returns that were filed on 17th May.

"We explained on 4 October that we had incorrectly sent a number of penalty notices to employers despite receiving their 2006-07 Employer Annual Return.

We have now identified the particular employers who were sent a penalty notice by mistake. The error is confined to online returns and mostly affects those sent to HMRC on 17 May.

We have arranged for these penalties to be cancelled centrally and are writing to each employer affected to confirm this and to apologise. We appreciate that current postal difficulties may mean receipt of these letters may be delayed.

Affected employers will know from their online receipt if their return was made by 28 May. If it was there is no need to take any action by way of an appeal or otherwise.

We would like to apologise again for any inconvenience or embarrassment caused to employers, their agents or payroll bureaux as a result of our mistake. "

http://www.hmrc.gov.uk/employers/news-pens.htm