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Problems cancelling Self Assessment

HMRC seems to have messed up its own systems

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For the third time in a week, a client reported having had a late filing penalty for 2020. In all cases I had revised the 2019 Return to show cessation of Self Employment, phoned HMRC and got a confirmation that the record has been closed. I had at the same time emailed confirmations to the clients only for penalties to have been issued.

In each case I have spent the usual 40 minutes waiting on the phone as the Agent Priority Line has been cancelled under HMRC's "Working against Agents" programme. My previous calls are all on record and new 'referals' have been initiated.

At first I thought that the original call-takers had put down the phone and done nothing, but now I suspect that a new system is to blame. They used to cancel the 2020 Return and send out a letter, but they now 'send a referal to Class 2'. I have no idea why this fresh step has been inserted but it seems that 'Class 2' are not responding, gumming up the works. I have a feeling that mine are not the only such calls being received at the moment.

Can anyone else provide their expereinces and insight? I shall start making follow-up diary notes in future such cases and check if confirmatory letters have not been received - in other words a loss of trust in HMRC

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By rmillaree
30th Mar 2021 10:14

I have always spoken to each department separately ref closing down records - so if you are formally closing class2ni trade record you do that first via ni time(transferred from main sa helpline) - you separately need to speak to the main sa helpline and advise the client didnt meet the criteria. I am not aware they even offer to do both from one phonecall as when i have spoken to class2 team they have always indicated i would need to speak to sa team to sort close of sa record.

I am not aware that any system has changed so if the info ref ni is correct i am not aware that sa team cannot now close via phone request there are then. Must admit i havent done a sole trader cessation return cancellation in the last month or so - so change is possible i guess.

I guess if anything is inconsistent a time lag could cause an issue eg if the sa adviser looks on the record when trying to close and the cessation date hasnt shown up yet on the last submitted tax retunr or the ni tag is is still live (these do tend to update very quikcly thankfully once class2ni team have closed)

where there are no knows inconsisties i simply speak to sa agent helpline advise client doesnt meet criteria and get confirmation from advisor thay they have closed the record there and then - when they have confirmed record has been closed verbally i don't think i have EVER had a problem - i did once 202 cancellation friday and this is done and dusted already with penalty gone to boot - i must say though this wasnt a sole trader case so it might now have changed for sole traders.

If it does go wrong i guess the clue would be if the advisor you speak to mentions the dreaded referal and doesnt confirm they have actually cancelled the return there and then - referals i would expect a delay and expect to have to chse unfortunately - hopefully if record is correct and up to date no referall will be needed and case will be closed.

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By sarahg
30th Mar 2021 10:15

We write to HMRC at the end of the last tax year that clients have to file to confirm that this will be their last return - we find that this generally stops more returns being issued

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By Duggimon
31st Mar 2021 12:09

I never appeal over the phone. A letter might take longer overall to get things cleared up but it takes much less of my time.

Dear Useless Agency

I refer to your penalty determination of [date]. The taxpayer was confirmed to be outside of Self Assessment by yourselves on [date]. We would therefore ask that you cancel this penalty and update your records.

Takes five minutes and the response is invariably positive because the people who deal with letters know more than the people who answer phones. Or possibly they're just more effective because they don't have to answer phones all day and are therefore not chronically depressed.

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