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£100 late filing penalty (2011) cancelled

£100 late filing penalty (2011) cancelled

This relates to the £100 late filing penalty notice for 2011 tax return. One of our client called up HMRC and informed that he ceased to trade during 2010/11. On this basis it appears that HMRC cancelled the penalty and treated the return as having been submitted on the same date. Subsequently we received the confirmation letter from HMRC. This came as a surprise to us because in the past, if a return was issued, it had to be submitted regardless of whether it should have been issued or not.

We spoke to HMRC’s helpline and they informed us that with the new penalty rules effective from Apr 2011, they have taken a lenient approach this year as this is the first year under the new late filing penalty rules and also due to the present economic climate where a lot of business have closed down the cost of pursuing penalties outweighs the benefits. They advised that the provision of this type of lenient treatment is not a new regulation but provisions were already included in FA2009. The person on the helpline could not pinpoint the location but said it was there. Is anybody aware of the provision in the Act or HMRC manuals where it is mentioned? If so, I will be pleased to receive the link.

I would also be interested to learn if other practitioners are receiving similar letters from the tax office.

Thank you.


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13th Mar 2012 13:03

HMRC would appear to be wrong

If the client ceased to trade during 2010/2011 then at return for the year ended 5th April 2011 would still have been due.

If it was the prior year that cessation occurred, I have had some limited success in getting tax returns recinded but only in the case where a client was registered for a self employment that did not end up happening.



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