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Parents have been given a fine

Parents have been given a fine

Hello my parents filled in self assessment tax returns For the past 3 years. This year they didn't have to submit any any, both are on a pension taxed at source with no other income or capital gains. Their accountant says he informed hmrc that they weren't going to fill in a tax return for 2014 / 2015 tax year last year. Last week they received a letter from Hmrc for a fine for not submitting a tax return. L Parents are elderly so have become anxious about this and the possibility of more fines. Accountant says he told hmrc but seems too busy to do anything
Any idea of what we can or should do. I understand appeals are never successful so do we just pay the fine and submit a return??

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By pacta
04th Mar 2016 08:02

Yes

1. Call the SA Helpline (details at https://www.gov.uk/government/organisations/hm-revenue-customs/contact/s...). Ask them that you were informed that the return had been cancelled by your (professional) adviser. You will need your parents on hand here to pass security. You are better early morning or late evening as this line is horrendously busy. 

2. They should, hopefully, cancel the return. That will also cancel any penalties.

3. Failing that, they may tell you that they need a return and if so, one will need to be submitted. You need to do that before 1 April to avoid daily £10 penalties. 

4. If you do need to submit a return, and there is a liability, as we are now 30 days past the payment due date, parents will have a 5% surcharge on the liability (plus interest arising). 

5. If a return is required, and penalties have been charged, I would recommend at least trying to appeal them on the grounds that you relied upon professional advice and have been failed in that regard. 

6. If that isn't successful, perhaps ask the accountant that evidently cocked up to pay the fines. 

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04th Mar 2016 08:23

I agree with the above.

Where the accountant seems to have cocked up (although we do not have their side of the story) is in merely telling HMRC that no returns would be submitted. That achieves nothing. What they should have done is given HMRC reasons why the notices to submit returns should be withdrawn, ask them to withdraw them, and wait for them to do so.

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04th Mar 2016 09:33

Did they agree ?

johngroganjga wrote:
I agree with the above. Where the accountant seems to have cocked up (although we do not have their side of the story) is in merely telling HMRC that no returns would be submitted. That achieves nothing. What they should have done is given HMRC reasons why the notices to submit returns should be withdrawn, ask them to withdraw them, and wait for them to do so.

I concur. You can tell HMRC that you're not submitting returns all you want but, if they don't agree, they'll send you a penalty notice.

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04th Mar 2016 08:49

All of the above

though if they have now submitted returns then technically one cannot ask for the return to be withdrawn now so you will be relying on 'reasonable excuse' and reliance on the agent having told them that they no were no longer required to make SA returns, which will probably be a problem as HMRC will say it's their responsibility to submit if asked not the agents.

The problem is that if one thinks that there is no need to submit a return any longer HMRC will not mark the records as such but say that you/they have to wait until a return has been required and then contact them to make a claim under s8B TMA to have the return withdrawn.

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04th Mar 2016 08:58

Very slight chance may be HMRCs fault

If no more TRs to be issued HMRC usually write to the taxpayer stating this, if your parents received these letters HMRC are to blame.

Very unlikely but I wouldn't put anything past them.

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04th Mar 2016 09:50

You ask

"... do we just ... submit a return??"

The answer to that is NO not if you haven't already done so. Instead speak to HMRC and ask them to withdraw the requirement to make a return under TMA s8B as their income is only PAYE and taxed at source.

They should then take you through their (non statutory) checklist of 'requirements to make a return' and should agree and withdraw the return for the year. Once they do that the penalties go away automatically.

What you should not do is submit a return as by doing so the option to request withdrawal under s8B disappears and you are stuck arguing Reasonable Excuse with HMRC over the penalty regardless of what liability the return shows

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04th Mar 2016 10:12

Some good advice
Interesting to read and good to see a genuine question answered so comprehensively

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