Client in prison and appealing against penalties

Client in Jail

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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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RLI
By lionofludesch
01st Jun 2017 15:58

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.

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By User deleted
01st Jun 2017 16:03

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"

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RLI
By lionofludesch
01st Jun 2017 16:11

The client, on the other hand, is one of the first to know.

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By Jim100
01st Jun 2017 23:27

He did have an accountant but not sure what happened as nothing was filed apart from one year of dormant accounts. I am just trying to pick up the pieces. Company house did try to strike off the company but HMRC would not allow it.

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By User deleted
01st Jun 2017 16:04

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.

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By Jim100
01st Jun 2017 23:30

The guy has been honest and transparent what had happened which I do respect hence why I decided to agree after much thought to become his accountant.

I am authorized now to deal with his affairs but cannot do much until he comes which is once a month

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By northernmonkey
01st Jun 2017 16:17

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...

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By Jim100
01st Jun 2017 23:34

Yes thank you for that - maybe useful in case HMRC refuse to quash the penalties. Though I find tribunal decisions are not always easy to follow.

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By Vaughan Blake1
01st Jun 2017 16:31

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.

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By Malcolm McFarlin
05th Jun 2017 10:50

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,

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