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Notice of surcharge

Notice of surcharge

Hi All.

Little background.

- was sent hmrc PAYE calculations for 2008/9, & 2009/10 which shows that tax was underpaid in those years.

- hrmc demanded that tax returns must be filed for these years and going forward. Spoke to them & informed them that I do not understand the need for filing tax return as the only source of income is from employment, & the underpaid amount is not disputed.  But they insisted that tax returns must be filed for those years.

- went ahead and filed tax return,only showing income from employments. Have now received notice of surcharge for late payment of tax @ 5% for both years. This surcharge is imposed under Section 59(c) of the Taxes Management Act 1970.

Is this surcharge valid, as I've never heard of such for underpayment of PAYE. & was not aware of the underpayment until the calculations were received from HMRC.They have given 28days to make this payments.



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By ACDWebb
04th May 2012 10:41

You should have had

three months from the date of being required to make the returns to submit and pay and 28 days after that before the surcharge bites unless you have agreed time to pay, or it was to be coded.

That overlooks any late notification penalty, however that is a separate matter altogether

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By codling
04th May 2012 11:37


This looks like a case where you should be considering whether ESC A19 applies.

HMRC has issued Tax Returns to force a liability under self assessment so that the underpayment can be collected through the self asessment regime with attendant penalties.

I am currently dealing with a case where an unrepresented taxpayer was sent calculations which were followed by 2 telephone calls from HMRC asking whether he was going to pay. When the taxpayer (not customer!!!) said he wanted answers to several questions first, he was issued with tax returns as a forcing measure, without his legitimate questions being answered.

Current position is that HMRC have admitted their failures leading to the underpayment but will not agree ESC A19 applies on the basis that he should have known he was underpaying. The fight goes on!

You need to find out why the underpayments arose and determine whether this was the fault of HMRC. You will then have to search your conscience to see whether you reasonably believed that your tax affairs were in order. If you can answer yes to both of these then ask HMRC to apply ESC A19.

There certainly seem to be some bully boy tactics being used by HMRC over these underpayments so please do not be afraid to quote the HMRC Charter to them. One important point in this is that HMRC are supposed to treat you as honest unless they have good reason not to. If they will not apply ESC A19 then presumably HMRC feel you are dishonest and you would need to take them to task over this.

Best of luck. 


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