Can we ignore notice to file?

Client has received notice to file but tax account says no return issued.

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Client is a pensioner with no need to file an SA return.  HMRC agreed last year and sent a letter saying no more returns were needed.  Her tax account also clearly states that no return has been issued for 2023/2024 but nevertheless she has received a notice to file.

I am inclined to ignore it but has anyone else had the same issue and what are they doing about it?  It has recently taken me three attempts to call the ADL (1 hour, another hour and 48 minutes at 8.00 this morning to speak to someone) on another matter before I found out about this issue, so I am reluctant to start all over again.

Replies (22)

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By K81
10th May 2024 12:00

probably!

do the UTR's match - possible duplicate record.

it may be necessary to double check the record closed, maybe if you are talking to HMRC about a different client get them to just check this one.

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By Paul Crowley
10th May 2024 12:09

When was the notice dated?
I would ignore it for a month and then check the agent portal.
I check agent portal on all the odd clients at least four times a year, as HMRC do issue returns at odd times of the year.

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Replying to Paul Crowley:
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By JB101
10th May 2024 12:43

HMRC do not date their letters/notices correctly. They are printed in batches and, if they even show an exact date, it is often the date they expected to post the letters rather than a reliable date.

"odd clients", eh? I'm lucky as I only have relatively normal clients!

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Replying to JB101:
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By Paul Crowley
10th May 2024 13:09

I did mean odd, as in those that no return is expected to be issued for.
I get at least three a year that HMRC have changed their mind on after issuing the letter stating the year that will be the last return.
Usually they are based on data received by HMRC and there is a genuine need with a real liability or refund.
Clients tend to ignore the notices, because they have the prior letter.

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By Roland195
10th May 2024 12:20

I would guess that the process to start issuing a Notice to File was started long before 6th April and could not be stopped in time so the online record is likely to be the most accurate however I would review again in a few months to make sure.

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Replying to Roland195:
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By rmillaree
10th May 2024 16:11

i would second these comments - hmrc go as far as warning when they remove people from sa they might get the letter but that letter can safely be ignored as long as the online flag confirms no return has been issued.

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Replying to rmillaree:
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By FactChecker
10th May 2024 17:19

But since client "has received a notice to file" - and this will state "when you need to file" it - a reasonably close watch will need to be kept on whether that online flag remains unchanged.

To the best of my knowledge the flag isn't time-stamped so, if the NTF letter like so many is dated 6th April, there may not be as much notice as taxpayer would like (if we're all wrong and it's the online flag that hasn't been updated yet).

Another example of HMRC's lack of systems integration, further undermined by their reliance on sloppy 'dates' that may not say when anything was notified.

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Replying to FactChecker:
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By rmillaree
10th May 2024 17:29

i cant imagine that the online flag would ever not be up to date if it says no return issued - i am waiting to be shot down in flames here i must admit !!

note i was presuming that anyone who gets the letter would be checking the online flag (again?) and not presuming that an earlier prior check would mean no check necessary.

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By More unearned luck
10th May 2024 17:29

"Can we ignore notice to file?" Surely a foolish thing to do!

Have you seen the purported notice? As someone else has said does the UTR match? Does the tax year match, the online record?

If the answer is yes to both questions then ask again for the NTF to be withdrawn and the SA record closed down. Do so by letter - it will take up less of your time.

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Replying to More unearned luck:
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By MartinJones
10th May 2024 20:57

I agree. The NTF may just be an automated batch process but so will the non filing penalty that follows in the new year...

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Replying to More unearned luck:
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By RAS1
11th May 2024 15:09

With this sort of situation I would just write back with a copy of the letter from last year saying no more returns required, and screendump from this year showing not required.
That makes it HMRC's problem if they don't process the letter in time -
if they drop it, you have nothing more to do;
if there is an automated fine, you have the evidence to get it rescinded.
Much quicker than trying to talk to anybody at HMRC.

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By Xtaxman
17th May 2024 10:06

You can simply ask for the Notice to File to be withdrawn based on the previous agreement that no Returns would need to be filed.

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Replying to Xtaxman:
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By rmillaree
17th May 2024 10:14

if the live pta confirms no return has ben issued - then the facts are no return has been issued and there is no need to ring to withdrawn the return as the return wasnt ever issued. the letter simpley wrongly states the return was issued due to timing issues -simply shred letter and job done. No harm in ringing hmrc to double check if one want to but imho the live pta flag will not be wrong here

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Replying to rmillaree:
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By More unearned luck
17th May 2024 15:59

The thing that triggers the requirement to make a return is the notice to file; it is not whatever it says in the PTA. Clearly for as long as HMRC's records remain inaccurate their computer won't issue any LFPs and the notice is shredded with nothing further done. But HMRC might correct their records. The current absence of an issue date on the revenue's system might be just a timing difference.

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Replying to More unearned luck:
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By rmillaree
17th May 2024 16:48

The thing that triggers the requirement to make a return is the notice to file

yes normally and no here - the problem is this letter saying there is a notice to file is wrong and should not have been sent - its basically lying or telling an untruth - the issue here is a specific known timing issue that hmrc warn people about - if one is removed from sa quite late towards 3st january or later - the letter has already to be booked for saying that a return will be issued - that letter is known to be wrong and hmrc have categorically not meant to issue anotice to file.

in this case there is nothing to correct

obviously one should check the online flag if one gets a letter but if that says no return is issued that flag is correct and the letter is wrong so hmrc's records are correct and the only wong un is the letter.

i am not sure why tis thread is making these timing issue letters sent in error harder than it needs to be !

"The current absence of an issue date on the revenue's system might be just a timing difference."
imho if the flag changes - it always changes online then letter follows - never teh other way round

note i am not saying dont ring hmrc to check if one is uncertain - dont take my word for it - if one has doubts please ring hmrc and ask - was this letter sent wrongly due to timing and can i ignore and they will say yes

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Replying to rmillaree:
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By More unearned luck
17th May 2024 17:31

Section 8(1) says:

"For the purpose of establishing the amounts in which a person is chargeable to income tax and capital gains tax for a year of assessment, and the amount payable by him by way of income tax for that year, he may be required by a notice given to him by an officer of the Board–

(a) to make and deliver to the officer, a return..."

There is no mention of being required to make a return by dint of a date in a field in HMRC's computer.

"...this letter saying there is a notice to file is wrong and should not have been sent - its basically lying or telling an untruth..."

apart from the facts that the letter is the notice and that lie and telling an untruth are synonyms you seem to have invented a new reasonable excuse for filing late "I thought that the letter was telling a lie, gov".

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Replying to rmillaree:
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By FactChecker
17th May 2024 19:53

It feels like OP's original wording has got lost amongst all the ensuing comments:
"Her tax account also clearly states that no return has been issued for 2023/2024 but nevertheless she has received a notice to file."

Those last 7 words (assuming they are true) are what matters ... once received a taxpayer has only two choices - get it withdrawn (properly and within deadline) OR file a return (which if late will generate penalties).

Relying on what the PTA shows (or an HMRC member of staff tells the taxpayer) may save time, but will offer no protection if the Notice is ignored.

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Replying to FactChecker:
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By rmillaree
19th May 2024 10:51

It feels like OP's original wording has got lost amongst all the ensuing comments:

Not by me they havent - when they say the following

"HMRC agreed last year and sent a letter saying no more returns were needed"

This to me is he key text - its common that (and hmrc specifically warn of this fact) the letter saying a return is needed is bascially booked for sending and gets sent when it shouldnt have been sent (if their it had worked) - hmrc have not issued a notice to file and nothing needs to be and hmrc confirm this fact. the live flag in the online account is ALWAYS more up to date than letters in this regard.

this being the case you are completely wrong to state

"Those last 7 words (assuming they are true) are what matters ... once received a taxpayer has only two choices - get it withdrawn (properly and within deadline) OR file a return (which if late will generate penalties)."

they can do nothing presuming my presumptions are 100% correct that this is a letter sent in error . i would agree if one has doubts ring hmrc and confirm that no action needed. Lets not pretend hmrc want a return if the letter is the item that is wrong here !!!

nother case where hmrc sloppy I.T. is causing unecessary confusion.

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Replying to rmillaree:
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By More unearned luck
19th May 2024 13:13

If you haven't overlooked the seven words then you have failed to appreciate their legal significance. Even if your assumption that the NTF was issued in error is correct, it is still valid.

Your view seems to be that once a taxpayer received a letter saying that they don't have to complete any more tax returns they are absolved for ever from having to comply with s 8 notices.

HMRC can, of course, change their mind and at the same time be slow to update their records.

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Replying to More unearned luck:
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By rmillaree
19th May 2024 13:58

Your view seems to be that once a taxpayer received a letter saying that they don't have to complete any more tax returns they are absolved for ever from having to comply with s 8 notices.

nope i am saying in these specific circumstances where hmrc have closed the record and confirmed that fact and the live flag confirms that fact - the incorrect letter should not be treated as anything more than being an error - hmrc will confirm that error if one checks with them - where the reason for the issue is due to this hmrc flaw then clearly its note a notice to do anything if hmrc are saying confirming that fact !

Anyone with and doubts here simply need to ring hmrc to confirm the position.

"HMRC can, of course, change their mind and at the same time be slow to update their records."

Yes - indeed but in my experience the live flag on hmrc's system is very reliable and i have never seen it be out of date with the letter being the correct live state of play!!

I cant ever remember having had hmrc say a closed live flag is wrong and that the letter is actually correct where the 2 disagree !

I would concede anything is possible and one should check online later and also check with hmrc if they have doubts - i am not saying anyone should ignore the notice to file if they have the slightest doubt here - it makes sense to check with hmrc but lets not pretend that the "letters hmrc sent in error" are anything other than "a letter sent in error"

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By LAMBERTCLERICAL
19th May 2024 11:49

I tend to have the reverse of this problem. I receive letters stating no further returns to be filed, but often for owner-directors who annually take dividends from thier companies according to the varying profits.
I used to tell clients I was happy that HMRC kept me in business, but I'm having serious doubts.....

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Replying to LAMBERTCLERICAL:
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By FactChecker
19th May 2024 18:33

Yet another example of HMRC's sloppy wording (typically within communications addressed to their 'customers' who are presumed to need 'simplified' messages).

A letter "stating no further returns to be filed" doesn't actually mean what most people understand it to mean (that you are absolved from the need to file unless HMRC later sends you a NTF) ... it simply means that their system has (for now) been set to not issue an NTF.
This may change at any time (because they spot something and issue a NTF) or because you, the taxpayer, do or receive something that triggers your obligation to inform them.

WHY this has happened for one or more "owner-directors who annually take dividends" is beyond logical comprehension (assuming that those dividends were reported correctly in previous year's return) ... but no reliance can be placed on the 'no further returns to be filed' letter to provide protection from obligations.

FWIW even the poor 'Check if you need to send a Self Assessment tax return' tool at https://www.gov.uk/check-if-you-need-tax-return will tell your owner-directors that they need to file.
It's basic, but not as basic as the stupid headlines HMRC put out via press releases.
If Q7 (Did you get more than £10,000 from dividends or savings and investments?) is answered truthfully, then you'll find "You need to send a Self Assessment tax return" - irrespective of any other answers you gave.

AND coming shortly, there will be an extra question in the SATR specifically for an owner-director (or more accurately director/shareholder) to specify how much they received in dividends from 'their own' company!

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