Client went in prison for an offence totally unrelated to his business for 5 years but will be out in a couple months time after serving 2 years. Currently allowed out a few days a month
He had a limited company and has incurred large penalties on self assessment and corporation tax for not filing for two years. I assume HMRC would quash these penalities since being in Prison seems a reasonable excuse ? Has anyone else been successful in appealing against penalties when the client has been in prison ?
There are companies house penalties and know from experience these penalites are more difficult to quash but was thinking of filing two years accounts in one go so doesn't end up with any penalities
Replies (10)
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Sadly, the obvious course of action would have been to appoint a director - or, indeed, an accountant - who could have looked after the company and his personal affairs properly.
He can get out of the company penalties by getting it struck off. Whether that's a good idea depends on information which you do not disclose.
As I know from a recent experience Lion, accountants are usually the last to be informed, when client's are sent to prison.
I can fully understand what you say, however, the reality is often "clouded"
Presumably, you are authorised (at least for self-assessment) purposes? If not, I imagine it will be nigh on impossible to deal with HMRC on behalf of your client.
If you are authorised I'd be tempted to speak to the dedicated agent line to see if they can provide advice. If not, I'd probably write to the Self-assessment department and outline the circumstances, including a formal appeal, on the grounds which you state.
As regards Companies House, I've had some success, with my own company when I was medically incapacitated a couple of years ago.
In reality, all you can do is try to do your best for this client and, be honest with those who you deal with.
Whilst your client has obviously committed a crime and, is serving the sentence, I see no reason, or justification, for kicking a man when he's down. It really serves no useful purpose.
There has been a recent case where incarceration was found to be a reasonable excuse, only on the basis that the late Tax Returns were then filed promptly. Have a read http://financeandtax.decisions.tribunals.gov.uk//judgmentfiles/j9785/TC0...
Sounds like an appeal is not unreasonable and should stand a good chance of succeeding on the basis of "if you don't ask..."
If he is being allowed out for a few days each month I presume that there in no reason why he can't use this time to sort matters out. It strengthens the case considerably if he sorts things out immediately after the 'reasonable excuse' event has ended.
Do you think there is a reason why HMRC are refusing to allow the company to be struck off by Companies House? It may be because they consider there have been tax irregularities or a large tax debt,