Late tax return penalties

Late tax return penalties

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Has anyone else had a spate of new personal tax clients arriving with late tax return penalty notices recently?  The clients in question all earned over £100k in 2010/2011 but did not receive notices to file tax returns, so they didn't!  They were aware that they needed to file tax returns, having never been under self-assessment before. 

HMRC haven't sent out the late tax return penalty notices until after 30 April 2012 when £200 penalties are already due.  What do you think the chances of appealing the penalties are given that HMRC knew back in May 2011 who these taxpayers were and surely should have sent letters advising the taxpayers that they needed to file tax returns during the past twelve months.  To make matters worse, many of these clients appear to owe tax as their tax code for 2010/11 included a personal allowance for the year so they owe around £3k in underpaid tax for the year too.

Any answers gratefully receievd as I'm trying to work out if these are one-off cases or a national issue.

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By ACDWebb
21st Jun 2012 08:15

Presumably you mean

"They were NOT aware that they needed to file tax returns, having never been under self-assessment before."?

Are these return filing penalties of failure to notify penalties? Going by amounts probably the former in which case I suppose one needs to find out when HMRC thinks they issued a notice to make a return, where they sent it and if the client actually received it

The HMRC Registering for SA page does not obviously suggest that income >£100k might require one to register, thogh if you click through to  Do you need to complete a tax return? that does.

Perhaps have a look at the HMRC staff learning module on "Failure to notify" which would suggest it should fall at the lowest level

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By User deleted
21st Jun 2012 10:04



We do have similar cases and our view is as follows:

PAYE Reg. 72 (amended 2008): ‘Employer taking reasonable care’ to comply with the regulations: shouldn’t this mean the employers with large number of employees drawing more than >100k should have appropriate software that takes in to account the personal allowance ineligibility? Tax codes cannot have this factored in, particularly where bonuses are involved towards year-end.

SA filing penalty: As for penalty there shouldn’t be a penalty where no ‘notice to deliver a tax return’ has been issued. 

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