Late filing penalties appeal

penalty not reasonable compared to tax

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I've had a couple of appeals along these lines accepted but they did have other circumstances too.

I now have a sub contractor who started self employed income in Feb 17 but failed to file the 2016/17 return until he came to me to complete the 2017/18 and therefore it was only filed in the last month. He now has penalties of £1300 despite there being no tax due and a refund of the CIS tax deducted of nearly £600.

I've put in an appeal which has been declined but is it worth requesting a review on the decision along the lines of the penalty being excessive compared to the tax due.  Ultimately it is the clients fault as he would have received the notice to file but I would like to give it a try.

Replies (4)

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By Paul D Utherone
25th Sep 2018 13:16

When was the return issued?
Did he receive it and just stick his head in the sand?

You'll likely be on a hiding to nothing

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By SJRUK
25th Sep 2018 14:39

Usual date of 6 April 17 was the filing notice but return not filed until 6 August 18.
He didn't actually realise he needed to file the return as he didn't have tax to pay & didn't realise the consequences - so yes he stuck his head in the sand.

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By Duggimon
25th Sep 2018 15:47

I've had penalties overturned in a similar situation by writing a letter with a bit of a sob story and asking for discretion but I always advise clients that there are no grounds for appeal and it's just a hit and hope effort, HMRC are perfectly entitled to refuse and I imagine they usually will.

There usually has to be more of a reason than your client has, even if it still falls short of reasonable grounds for appeal.

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chips_at_mattersey
By Les Howard
25th Sep 2018 16:40

The penalties are not tax-geared, so the fact that the penalty exceeds the tax due will not, by itself, give you a defence.

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