Share this content
9

Appeal late filing penalties

Appeal online or by post?

Didn't find your answer?

Have been asked to appeal the following late penalties: £100 missed deadline, £900 worth of daily penalties as 3 months late, £300 applied Jun 2020 6 months late & £300 applied 1 October 2020 even thought return filed September 2020 - all this for a CIS subcontractor who had a return issed for yr ended April 2018 in Jul 2019 (prompted by submission of the return to April 2019 I'm thinking) and who should inevitably be receiving a refund

I'd be grateful for guidance as to whether I should appeal 'online' or on paper.  I know that it may be a fruitless excercise as the usual time limit for appeal is 30 days but I have said I would try - nothing ventured and all that.

Thanks in advance

Replies (9)

Please login or register to join the discussion.

avatar
By SXGuy
25th Oct 2020 06:37

Paper

Thanks (0)
Replying to SXGuy:
avatar
By jane
25th Oct 2020 09:50

Thanks for the reply - I'll get one completed.

Thanks (0)
My photo
By Matrix
25th Oct 2020 07:55

When was the notice to file issued? Are you happy with the grounds of appeal?

Thanks (0)
Replying to Matrix:
avatar
By jane
25th Oct 2020 12:33

According to the portal it was issued 18 July 2019, together with the one for yr ended 5 April 2019 - but that was submitted 14 July 2019 - so that makes no sense!
The £100 fine (missed deadline) was rec'd Oct 19 which also contained the notice about daily penalties wef 1 February. My customer hasn't told me that they rec'd the further notices about £300 (applied June 2020 & 1 Oct 2020 despite the return being submitted 15 Sept 2020) I'm just taking dates off the portal as to when the fine's been applied to the account. I know it's a long shot. I'm going on the angle that my customer has been subject to the HMRC automated penalty mechanism and not determined 'by a person' (some case law I found by searching AWeb) - perhaps I am as naive as my customer as this is the first time I've appealed - but 'nothing to lose'. Thanks for taking time to respond.

Thanks (0)
Replying to jane:
avatar
By Paul Crowley
25th Oct 2020 14:12

The automated system issue no longer applies.
But then the HMRC worker may not know that.
If client wants you to submit then submit.

Thanks (0)
Replying to Paul Crowley:
avatar
By jane
25th Oct 2020 18:28

Ah - thanks for that - I'll submit and see what happens :)

Thanks (0)
avatar
By richard thomas
25th Oct 2020 20:09

The argument about automated penalties did not apply to the making of Sch 55 FA 2009 penalty assessments : it was about (a) whether there was a failure by HMRC to issue a personalised notice to file and (b) whether automatic penalties under s 100 TMA (CT returns) were unlawful. A case where I was the judge and which HMRC did not appeal - but see s 103 FA 2020.

In my opinion automated Sch 55 penalties are not justified, but the argument is difficult and would mean going to the Upper Tribunal at least (with costs awarded against the loser) to establish, as HMRC will fight this at the FTT with counsel.

This apart I cannot see what reasonable excuse your client could put forward, but try if you have promised. Expect to fail.

Thanks (0)
Replying to richard thomas:
avatar
By jane
25th Oct 2020 22:20

Thanks for your reply - as this is the 1st time I've appealed I've read so many articles my eyes hurt - and I know somewhere in the course of my research I've read words to the effect that 'The Revenue need to realise that CIS subbies are good at building houses and rubbish at tax'the system' and only in 'the system by virtue of CIS'! I got involved in assisting with the Apr 19 return submitted July 19. I did not want (for various reasons) to become 'agent' so no 64-8 completed. The missed deadline notice was rec'd and neither customer or his parents (who'd been in PAYE) all their lives 'understood' the notice properly. They did indeed pay the fine of £100 but didn't assimilate the 'small print' about completing the return for Apr 2018 - issued Jul 2019 - but no one knows where the notice to file was sent to. I don't mind trying an appeal - there a lots of things I've learnt in the process thanks to all the helpful people on AWeb :). Ultimately I should have realised something was awry when helping them complete the return to 5 April 2020.

Thanks (0)
Replying to jane:
avatar
By richard thomas
26th Oct 2020 10:29

I replied in haste to warn you about the costs you might incur if you did go down the appealing on the basis that they were automated penalties path. Having looked at what you say in both your original post and your reply to Matrix, the position seems to be this.

£300 12 month penalty. If this was actually issued on 1 October 2020 then (a) you are in time to appeal and (b) the penalty is invalid. This is because your client failed to make a return by 18 October 2019 (3 months from the date of issue) and there have not been 12 months before the issue of the penalty.

The other penalties are out of time for appeal, the minimum being about 4 months and the maximum a year. HMRC will take the point that these are late (they use 3 months as a yardstick) and will require you to show a reasonable excuse for the failure to appeal in time (not the same exercise as a reasonable excuse for the failure to deliver the return on time).

Unless HMRC are convinced by the excuse (or fail inexplicably to take the point) you will have to go to the Tribunal to have the appeals accepted by HMRC. The FTT can take into account a wider range of matters than simply whether there is a reasonable excuse, but in the absence of special circumstances that is what they will major on.

One of the things the FTT will do in that exercise is apply the rules for late notices in the Courts, known as the Denton principles. In the course of that they will ask themselves if either side has a potentially knockout case on the merits of the appeal, ie whether your client's reasonable excuse is so compelling a Tribunal would very likely accept it or is so rubbish that they are bound to lose.

If you get past this hurdle the client then has to show to the tribunal a reasonable excuse for the failure to file in time. In an area such as making SA returns, ignorance of the law is unlikely to cut much ice, and not understanding a fairly simple notice warning about impending deadlines even more so.

At present this will all be done by the Tribunal on paper, so make sure your arguments are clear cut. A personal statement by the client and his parents would be more helpful than your account of what they did and why.

Thanks (0)
Share this content

Related posts