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SA Surcharge notices: HMRC delay is a ‘reasonable excuse’

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30th Apr 2007
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HMRC have announced that some Self Assessment (SA) surcharge notices due to be sent from Accounts Office Cumbernauld during March were subject to a delay in despatching. The release says that HMRC is "seeking to clarify the position regarding the Surcharge Notices issued in March".

If a taxpayer makes a late appeal as a direct result of the delay in receiving the original notice, HMRC will accept this as a ‘reasonable excuse’ for the purposes of accepting the lateness of the appeal. Its adds that "separate consideration will be given to the other facts in each case to inform the decision as to whether the appeal is fully valid overall."

Tax editorial comment
Nichola Ross Martin adds:
Firstly, what on earth does HMRC is "seeking to clarify" mean? Seeking to clarify something from itself, or is the post office responsible for the delay?

Secondly, one presumes that this "reasonable excuse" will work for the late PAYE penalty notices too.

Thirdly, on talking tax with the "men in the pub" - literally, I discovered that some SA statements of account confirming the 2005/06 liability have also been sent out late. So late that it was impossible to pay the correct amount by 28th February. Also statements have been sent out late and without payslips, which presented particular problems where taxpayers found themselves unable to pay on the 28th February, as without a Payslip you are rather stuck. Obviously there would not be a problem if the taxpayers did not leave it until the last minute to pay, but that is not real defence for the delay in sending out statements. In both situations it would expected that surcharges would be due, as of last weekend, none have yet been levied. What are your experiences of SA charges this year?

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Replies (6)

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By User deleted
01st May 2007 23:28

HMRC need to set the example for others to follow
It has been my contention for some time, that the Inland Revenue should get it's own house in order before it starts imposing hefty fines on the taxpayer for failures to meet specific deadlines. It is the fact that these penalties (I am thinking primarily of PAYE and CIS) can become all out of proportion to the alleged "crime" or size of business. When you sit this alongside HMRC feeble and inconsistent "excuses" regarding the 2005/2006 PAYE penalty notices and now IT surcharge notices, it is just not congruent. If they want to have the power to levy such fines then they need (in my opinion) to set the standard. How can they reasonably sit before the Commissioners and argue that their "customer" should be severely fined (let's say £900) for failure to meet a deadline, when their given 'reasonable excuse' for taking 9 months to alert their customer to his or her failing, is weak to say the least.
I wrote not so long ago regarding an enquiry notice issued in January 2007 to a Tax Return submitted in June 2005, where the Inspectors letter gave the "customer" 30 days to reply, and one assumes would have been followed up by a formal notice given similar time under threat of financial penalty for failure.
To my mind these penalties, applied automatically without any thought, may drive a terminal wedge between HMRC and their "customers" and I think it is time the powers that be, gave serious thought to simply waiving the penalties in the case of the PAYE fiasco where HMRC themselves have not helped matters and where they stand to gain by "encouraging" on-line filing. One lives in hope.

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By User deleted
02nd May 2007 10:20

Punishment Fit the Crime
Parliament ought not to have let the Revenue implement such a blanket penalty regime in the first place, and then maybe there would be less chance of that power being abused.

To fine the same £100 per month for a self employed start-up with one part time apprentice as an established business with 49 employees is simply out of proportion and hits the small man much harder than the larger concern.

When a Government Department automates such penalties, profits from them and then administers them incompetently, the uneven powers Parliament has given should be withdrawn, lest we begin to think the penalties are really there to raise money.

MANDARIN :- " I know, lets have many more deadlines and a shorter filing window ". The CIS penalties will be abused in the same way, only 12 times more often.

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By User deleted
02nd May 2007 19:03

Hmm.
We have been receiving a fair bit of HMRC mail with apparent delays. 23 separaet letters advising details of references to be used with PAYE remittances dated 11th February have arrived in the last 10 days, and yes we have had the first surcharge notice - dated 27th March but not deliverted until 20th April.

I am not a conspiracy theory person (normally) but this ...

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By MarionMorrison
02nd May 2007 20:18

Working Together?
Isn't this exactly the sort of thing that WT could address? The delays between date-on-document and date delivered could be caused by the Post Office, they could be caused by delays in the metaphorical Revenue postroom with piles left lying around waiting to go, or they could have a date printed on them that does not reflect the day it's going to leave the building.

I expect it's the last of these three. The computer (or the human being even) decides on the issuing of a surcharge on 1st March and it's marked to go. But the document is not actually printed and sent until two weeks later because of delays in the printing and distribution pipeline.

But the Revenue should know the answer. We just need them to fess up to it and that's the sort of thing that WT should be dealing with instead of more dull blurbs about future plans.

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By CathyB
03rd May 2007 09:03

No payslip
Go to www.hmrc.gov.uk/howtopay/nopayslip.htm

I know this is an ideal world scenario, but if the tax return was submitted before 30 September, then HMRC should have sent a calculation, whether they send a statement or not. If submitted after that date then the TR should have shown the tax due. HMRC's argument is that if you know how much to pay, you should pay on time - ideal world again, I'm afraid!

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By abelljms
14th May 2007 11:43

idea
let's start sending hmrc an invoice for £100 every time they take more than a month to deal with something sent to them?

or when we ring them up, and fail to get through, and have to ring for several days and in the end give up and write to the little creeps?

and see who squeals?
if we all did this they would be forced to sit up and focus on real co-operation with agents rather than just posturing co-operation which is just slimy...and part of hmrc attitude for the last 10 years+ .

we all know the new CIS fascist regime is another way of [***] more penalties out of us for "failing to get figures in on time" i.e. the looong period of 2 weeks after the numbers/event stop happening.
After all if we can do it for CIS we might as well get annual accounts in 2 weeks after the y/e?

must get some more unpaid work done reconciling figures to the useless data hmrc gives me on tax payments my clients have made

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