We submitted a client's 2017 SA tax return on the 31/1/18 - and advised the client to pay the tax etc.
Client always settled his liability based on statements issued by HMRC
HMRC did not process the return so the liability and subsequent payment on account adjustments never pushed through onto his statement so he never paid the liability.
This came to our attention last October as the client was applying for a mortgage and needed the SA302's - this was showing as zero due to the return for that year not being processed so we chased HMRC. They then processed the return some 4 weeks later and straight away applied late payment penalties etc.
We succesfully appealed against the penalties on the basis of the late processing of the return and HMRC have since cancelled them.
I'd be interested to know other practitioners thoughts on this as they are now chasing him quite hard regarding the outstanding tax which to be fair is causing him some difficulty as he now has 2 years liabilities to settle?
Replies (4)
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Well done on getting the penalties cancelled. I don’t see how the failure to process the return is linked to the late tax payments.
Wouldn’t you have provided the tax payable and the due dates when he signed the return?
I have no experience of a return not showing but not surprised it happened.
Ask for a time to pay arrangement. The tax was always payable and the client shouldn't have waited for an HMRC statement. If the Tax Return was submitted on 31 January 2018 he was always going to pay them late.
I've always been of the opinion that an essential element of self-assessment, is exactly that - the regime is "self"-assessment.
Moving forward, in cases where it would be unrealistic/unreasonable to assume that HMRC could raise and issue a request for payment, the taxpayer should reasonably expect that payment is due, without reminder, on, or before, the due date.
Those are the expectations, from what I can see. The reality, of course, is often at variance and one has to risk the consequences.