A sports club I have a family connection with has had a visit from HMRC. I hear a number in the area have had the same.
Sometimes students are paid to do the bar and there is a cleaner but no payroll was operated. The sad thing is that most of the people could probably have completed a P46 such that no tax would have been due.
An assessment has been raised for 6 years of PAYE plus interest with a comment in the letter about penalties due under Section 98A (2) (a) TMA 1970 for failure to submit a return.
I had a telephone conversation with HMRC relating to the assessment level and in passing asked what level they expected the penalty to be. I was told it is a statutory penalty of £100 per month. I assumed that is £100 per month for 6 years, ie £7200! As the assessment may end up at about £5000 the penalty seems rather high. Is my assumption correct? Has anyone got any tips on challenging the penalty?