My partner started in business as a budding actor officially back in July 2015, when taken on by an agency. At the time I said I would help sort things out for her as she is in no way mathematically/record keeping/tax inclined.
My first mistake was to forget about letting HMRC know within 3 months of the business starting. I just thought and said to her that I'd have an easy tax return to complete pre Jan 31st 2017. (15/16 = no tax due as she is under her allowance overall. The self employed work itself may even be zero profit once I have tallied the expenses. Plus, it is only 1 single job she undertook that year, a few hours at £500)
Unfortunately I've practically had a break down through personal circumstances and ended up letting her down. I'm out of work, signed off, in debt, and at risk of homelessness. I tried to rally around end January time but left it all too late to receive the UTR & activation code for SA through the post. So from my understanding I said I'm sorry, it'll be a £100 late return fine and I'll sort it after a few weeks rest through Feb etc.
Well I had a terrible February personally/mentally, effectively lost my job and earnings in March, and then ended up suddenly waking up one morning in May to a shock. I was checking my email and read an accounting web newsletter with warnings about being 3 months late and the sudden incurring of circa £1300 fines.
Through my struggles I'd forgotten everything important and so I was now practically too late to even get her 15/16 return in by end of April 2017. I made many phone calls attempting to speed up the situation. Fast track a UTR. Try and find out if there was anyway to fast track the SA activation code. Finally came across Gov Verify as an option, downloaded an app, uploaded documentation and got her verified, accessed the usual SA account page, only to find out I could only "submit 16/17 tax year" and not 15/16. That was in the last few days of April therefore the end of the road. We had to wait for the activation code to come through, which has arrived today.
So now I can submit 15/16, late, automatic fines applied. These fines will ruin us, financially and relationship wise I expect. In your opinions and experiences is there any point or likelihood of success in appealing with a fleshed out version of my circumstances, or indeed anything else I should consider? Of course I am aware HMRC view her as liable for her own submissions and therefore her fault if someone she relied upon didn't come good.
As it happens through all the phone calls to varying HMRC departments (many of which were poor, wrong or incomplete advice and ridden with inappropriate attitudes) I now have authority to deal with all her tax affairs, not just a call by call basis. But I doubt that will impact upon their view that she is solely responsible for getting things in on time.
Your time reading and imparting any help and advice is greatly appreciated.
Many thanks,
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I'm not sure what advice you are expecting. The only sensible advice is to go and see a professional accountant and ask them to sort it out. It does not sound like you are emotionally equipped to deal with the issue, and the accountant will know the actions to be taken and can lay down appeals etc.
It will also help to show that by appointing a professional the taxpayer is ensuring that her tax affairs will be brought up to date quickly. That may help mitigate penalties.
Thank you Tim,
I suppose I was hoping for clarification one way or the other, but also advice as to any potential things I may have missed.
I appreciate HMRC can go easier when a taxpayer shows a willingness to cooperate and when they appoint a professional.
I'll advise her of that if it comes to it. The 16/17 return is nigh on ready to go however. The affairs aren't too complicated. So albeit not so in this instance, to save money going forward I may well look to continue dealing with her returns.
Thanks again.
Well, at the moment, you're not at the £1300 stage.
You owe £100 + £10 a day since 1st May, so that's £180.
Every day you delay is costing you a tenner until the end of July, then they add another £300.
Get on with it and save yourself money (the meter clicks up another £10 at midnight). Submit an estimated return (don't just pluck numbers from the air - do a bit of work to get your profits as close as you can).
If you feel you have a good case, appeal against any penalty but be aware that success is hard to come by.
Thank you Lion...
I had understood it as 3 months late equalling a backdating of £10 per day fines from February 1st to date. What a difference if it is £10 per day starting circa May 1st.
I'll be able to submit an exact return as I have the expenses listed accordingly now.
It may be beyond the scope of the original question but regarding an estimated return, doesn't it cause issues later, or flag the taxpayer for further scrutiny?
As you're implying, I have read in places (can't remember where now) that submitting an estimated return is sometimes used as a technicality to avoid penalties.
Thank you for your time.
It may be beyond the scope of the original question but regarding an estimated return, doesn't it cause issues later, or flag the taxpayer for further scrutiny?
Of course. You would need to submit corrected figures as soon as possible.
For sure I understood that would be necessary. However I meant scrutiny outside the box of that tax year in particular.
I imagine then that almost anyone in a similar position would look to play the technicality of an estimated return, ensure some tax is paid, before going back in later to fix accordingly.
(Of course getting in that position is terrible practice, as is my/my partner's situation now I'll freely admit!)
Regards
What is the actual date of issue of the 2015/2016 Tax Return? As you have three months to file online from this date so you may not actually be in a penalty position as of yet! Either way, get the Tax Return filed asap - just include the £500, leave the expenses if it's going to be too difficult to calculate what they are and what is allowable. Make sure you add in any other income she had in the tax year (e.g. employment income or government benefits). If you do file within the three months from issue date, there is no late filing penalty - only a penalty for failure to notify chargeability but this is tax-geared so if there is no tax to pay, there can be no penalty. And then get an accountant for moving forwards!
Many thanks Northernmonkey,
No notice to submit a 15/16 return has been received due to them not being notified of the self employment.
Whilst in late January I obtained a gateway logon, I don't believe I filled in an SA1 or CWF1 or made any phone calls to HMRC that could lead to them being aware of our need to submit a 15/16 return.
Is this corroborated by the fact that after logging in to the usual tax account page I was only presented with 16/17 as an available year?
I believe via information provided over phone calls that it was end of April that HMRC first became definitively aware of the need for a 15/16 return. It would be fantastic if that means we are not yet liable for the 3 month penalty.
And if the failure to notify is tax geared then even better. I was aware some penalties are tax geared but then I have a final question in this regard:
Even if I ignored all expenses my partner is under her allowance. Is there any benefit however in an instance like this (HMRC penalty procedure) essentially going one further from simply being under the allowance, whereby there isn't even a profit from the self employed work itself in isolation?
Thanks again!
Many thanks Northernmonkey,
No notice to submit a 15/16 return has been received due to them not being notified of the self employment.
Gamechanger.
You may owe nothing.
When did actresses become actors ? I missed that.
Via surgical procedures usually undertaken cheaply abroad.
.
.
(I missed it also!)
Thanks!
Sounds as though you definitely have the three months then! Yes, there is benefit to claiming the expenses if they give rise to an allowable loss as that could be offset against previous year income (if she was employed and paying tax for instance) or carried forward against 16/17 profits (if any!)
I'm not convinced you owe anything yet, though it may just be the absence of information leading to that.
If there is no tax due for 2015/16, then you do not have a failure to notify chargeability to HMRC. If HMRC have not issued a notice to file a 2016 Return then you do not have a late Return, either, and so no penalties will apply.
If HMRC have issued a notice to file since 1 March 2017, then you are still in time to submit and not be late.
It would be helpful to know exactly what has been received from HMRC and when.
Thank you Ste,
NorthernMonkey above alluded to this also. No notice to complete a 15/16 return has been received. (As it happens no 16/17 one has arrived yet if it is indeed on its way)
All that has been received from HMRC altogether is an SA50 April 2017 (after my recent phone calls to HMRC), a consent form for me to deal with her affairs, and the SA activation code yesterday.
I believe from the end April is when HMRC could well have definitively come to understand a return for 15/16 is due.
If it is as you muse that there may be zero penalty then what a relief that would be.
Again, much appreciated.
Hi Bernard,
No, but being self employed myself in the past and through enjoying learning things I have taught myself a fair amount on tax/bookkeeping over time.
I then moved onto completing other family members' simple tax returns when they lost their way. After which I also found employment as a bookkeeper part time.
I did pursue certain avenues for a career in accounting through applying for things/attending courses: funding for AAT, trainee accountant scheme for the local council, HMRC seminars, additional training. But unfortunately it never went anywhere and I am where I am today.
Thanks.
Make sure the return is submitted electronically rather than on paper. Assuming normal issue date electronic submission results in daily penalties from 1 May. Paper submission will give daily penalties from 1 February.
Make sure the return is submitted electronically rather than on paper. Assuming normal issue date electronic submission results in daily penalties from 1 May. Paper submission will give daily penalties from 1 February.
Good point. Submit on paper and the full £1300 is already due.
Thanks Wanderer,
It's particularly interesting that you mention this. This was a point of contention that I didn't mention in my original post as in the scheme of things it was besides the point.
However when I referenced "poor/incomplete" advice from HMRC that had something to do with being told by one agent to send a paper tax return to avoid being 3 months late.
This was encouraged alongside the wording of "the activation code takes 2 to 7 days to arrive, if you don't receive your activation code by the end of April then...." paper return etc.
That particular advice was from a phone call on Sat 29th April! When I calmly questioned her advice relating to the time & date I was met with a "well you've answered your own question then haven't you", followed by very poor attitude and a swift end to the phone call.
So regardless of whether the advice was intrinsically incorrect, unless I could drive/train/coach to Newcastle to deliver a paper return by hand there was nigh on zero chance of this happening.
I'm glad I didn't have a few days of April left because I may well have took a coach to Newcastle to hand deliver the paper return printouts in the absence of the activation code.
Make sure the return is submitted electronically rather than on paper. Assuming normal issue date electronic submission results in daily penalties from 1 May. Paper submission will give daily penalties from 1 February.
IF no return has yet been required by HMRC then paper or electronic the filing date is three months from the date they get around to requiring the return.
Just make sure that once you are able to view the record online HMRC have not already issued a requirement to file and it has not been received (for whatever reason).
If there is no liability for the year then there can be no late notification penalty as that is tax based.