Late filing penalties refunded

Late filing penalties refunded

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Hi, been a while but I thought I would share a recent success as it may prove useful to others.

Basically, a new client arrived with a sorry story of non-filing of self assessment returns going back to 2009/10. This is not my type of client but (a) He had been employed throughout the period (b) Had no other income (c) Was employed by a good client. It took about half a day to reconcile where he was at, file outstanding returns and remove him from self-assessment to stop the problem arising again. The crunch was obviously that he had late filing penalties accrued of just short of £5,000, some of which had been collected via PAYE and some were still outstanding. All were calculated correctly and levied in accordance with the rules. I told him I would appeal but not to hold his breath.

The appeal was on following grounds:

  • It was clear to HMRC that he was an employee throughout as they had issued tax calculations based on his PAYE record and had never made any attempt or suggestion that there was other income to be assessed. With this information they could have removed him from self-assessment at any point.
  • That £5,000 of penalties was not an equitable outcome for a person with actual liabilities of less than £10.00 arising from PAYE calculation anomalies.
  • The tax payer had had several interactions with HMRC over the period saying that he did not understand why he was in self-assessment or had to complete tax returns. They should have done more to understand what the problem was.

Anyway, it took one letter and two reminders but earlier this week all amounts were refunded. I hope this might prove useful to someone when faced with a similar problem.


Replies (5)

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By JCresswellTax
30th Jun 2015 09:04

Thanks Steve

I have a similar case and have written to HMRC along the same lines - fingers crossed!

Thanks (1)
By RedFive
30th Jun 2015 09:58

Great work Steve and thanks for sharing.

I've got one similar to that and sent the letter off about a fortnight ago. What was your timescale start to finish?

Thanks (1)
By Steve Holloway
30th Jun 2015 10:49

There lies the rub ....

I submitted the returns back in November and cancellation of the pre-2011 penalties was confirmed fairly promptly ... the appeal against the higher daily penalties was not mentioned. I chased in January and then again in March ... so 8 months in total. Had I thought we stood a greater chance then I would certainly have been more on the ball with my chasing!

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By RedFive
30th Jun 2015 11:04

not surprised
Thanks Steve, not unexpected unfortunately.

I've set my diary note for October, though that now looks optimistic!

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By refs8
30th Jun 2015 12:46


Totally agree - don't believe in giving up, we have one at the moment and expect the penalty to be cancelled.

I also as accountants we have to take a gamble and throw some time at something in which we may end up making a loss at if we don't win, but when you do it is a great feeling and your reputation goes up with the client.



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