Help needed in fight with HMRC - Late P35

Help needed in fight with HMRC - Late P35

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HMRC won't overturn a penalty of £500 for a late P35 so I am going to the Tribunal.  My argument is that I believed I submitted it electronically on 16 May 2010 (which was the date shown as last logged in when I got the penalty notice in October 2010), though admittedly I can't point to an email acknowledging receipt.  But if there was a problem I maintain they should have alerted me on 1 June like they used to up to (I think) 06/07, in which case I would have swallowed the resulting £100 penalty.  All PAYE was paid on 11 May after I did the reconciliation for the year so HMRC were not out of pocket.  Has anyone succeeded under similar circumstances and if they have, would they mind giving me their PAYE reference so that I can cite the precedent at the Tribunal (I've never been to one before and am rather apprehensive).

Many thanks for any help or advice offered!

Replies (11)

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By occca
23rd Jun 2011 12:10


 How have you ended up at Tribunal?

Presumably you wrote and asked for the penalty to be reduced to £100

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By jon_griffey
23rd Jun 2011 12:20

P35 penalty
One of my clients just won a similar case at the tribunal. The problem was that they submitted a test P35 return in error. However from the acknowledgement email that you get back from them you cannot tell if it is a test or live submission - the email is the same and so the taxpayer had reasomably thought that they had filed the live return. The tribunal agreed.

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By jvenegas16
23rd Jun 2011 22:57


All my appeals against fixed penalties have always been accepted so far. One letter and in about four weeks, confirmation that the penalty has been waived. That has been the case for P35, for two different clients, partnership, CIS, SA and CT600. I didn't need the tribunal, my argument was sufficient. For CIS I used a copy of the error to confirm the reason for a late return.

I would argue back to them before going to the Tribunal.


Juan Carlos

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By euanjohn
24th Jun 2011 06:21

Help needed in fight with HMRC - late P35

Yes, that's correct.  HMRC replied that they had no statutory duty to issue reminders and they had to wait over 4 months to allow time for them to sort out the unsubmitted returns (!)

Thanks, euan john

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By User deleted
24th Jun 2011 16:33

What software did you file with?

I use Earnie, and they keep a log of all transmissions sent, I would assume any other software would too. If you can show it was sent then it gives you a bit of leverage.

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By Caractacus Potts
24th Jun 2011 17:57

P35 penalty


I had a £400 penalty reduced to zero after initial letter.  Happy for you to see the letter but wouldn't share client specific details.



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By euanjohn
25th Jun 2011 12:13

P35 penalty

Thanks for this, I would like to see the letter and will naturally respect confidentiality.  If you would like to email it to me my address is [email protected] - many thanks

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
01st Jul 2011 14:52

Jusilla and Ballysilla case precedents

I just finished putting together an article that touches on some of your points. In April, Geraint Jones QC gave HMRC a pasting in three cases relating to P35 late filing penalties.

The European Court of Justice ruled in the case of Jusilla v Finland that taxation penalty cases should be subject to the same burden of proof as criminal charges - "beyond a reasonable doubt". HMRC has tended to assume that its computers can't be wrong, but the tribunal judge took a very different view.

In the Ballysilla case, he accepted the verbal testimony of three witnesses who saw the return filed. It might not be your strongest strategy, but suggests that if you can produce log file information you're stepping in the right direction.

The Dudley Electrical Contractors case also saw HMRC get a monstering for deliberately withholding a penalty notice until after the deadline fell for an additional penalty. In that case, the tribunal judge noted, "HMRC , well knowing that the P35 had not been filed on time, desisted from sending a first penalty notice to the appellant until 29 August 2008, being 19 days after the start of the period when a second penalty (£300) could be levied. That is not plain dealing. It might be the case that there is no obligation upon HMRC to issue a reminder but given that it has the statutory power and/or duty to issue a penalty notice, that should be done timeously and well before any second penalty period begins because, as a matter of common fairness and justice, that operates to put the defaulting party on notice that it is in default and gives that party a proper opportunity to remedy that default. In my judgement it is not open to HMRC to take advantage of its own default in sending a timeous default notice to a taxpayer. That would offend the common law principle of fairness and most right thinking members of the public would find it repugnant, especially on the part of a public body."

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By hclairesavage
06th Jul 2011 20:48

got that particular T-shirt....!

You ought to be able to get it down to £100. Have you tried quoting COG914045 at them? Recently worked wonders for me on one of my clients. You're welcome to see my letter in anonymised form.

Email me: [email protected]

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By euanjohn
07th Jul 2011 17:26

Success at Tribunal

I won the case at the Tribunal today and the £500 penalty was quashed.  May I thank all contributors for their help and advice.  Whether it was worth thousands of pounds of public funds for the Revenue to involve loads of their staff fighting such an unjust case is another debate.

Many thanks again

Euan John


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Brian Heller
By williamb1
03rd Oct 2011 16:48

Copy of my protest to FSB : for your info. Suggest others do .

I am very concerned re: HMR&C’s latest penalty regime, particularly for small businesses in the current economic


The latest penalty change is to send out penalty notices re: late employer annual returns, just now being received by

some of my clients.

They state officially that they are not reminding employers until they are 4 months late.

This generates a “nice” £400 fine ( might have been £100 if the employer knew earlier).

Apparently this now includes employers’ who may not have thought they had to file a return because

a) there were no employees in the year

b) there were no deductions due.

It would be useful if you could make known to FSB’s spokesman at the Conservative Party’ Conference this

view which I am sure will be echoed across

small businesses nationally:-

that the penalty regime has become too harsh and unaffordable

( especially the delaying tactic of penalty notification and hence maximising the fines collections,

HMR&C give a different reason! But they would wouldn’t they!!))


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