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£3200 Self Assessment fines although i was on PAYE scheme

£3200 Self Assessment fines although i was on...

Hi, I was working for a company until early this year when they folded.  I was a sales director ad was o an annual directors PAYE scheme.

I'd been receiving letters from HMRC since about 3 years ago requesting self assessment to be completed, so I queried these to the accountant at our company and he said to contact HMRC and to tell them that I was on a PAYE scheme, and I duly did this.

About a month ago I had a collection agency call on me on behalf of HMRC so I called HMRC to query this and was told that they needed the returns completed.  I downloaded the forms, completed the returns and sent them off; I owed no tax for any of the years.  However HMRC are still demanding that I pay the fines and interest.

I am at a loss, since I was on the understanding that we had correctly provided returns via PAYE.  Can anyone give me some advice please?


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04th Jan 2014 14:53

Pay up

My advice is to pay it ASAP to avoid further interest, or reach an agreement to pay by installments.  If you received notices 3 years ago and didn't file then you probably don't have much wriggle room.

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04th Jan 2014 15:08

Did you receive the penalty notice? If not appeal and ask why returns were needed since all of your income was taxed through PAYE. Ask them to waive the penalties on the basis that the returns shouldn't have been issued. If they don't agree ask them to list the appeal for hearing by the relevant tribunal.

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04th Jan 2014 15:14

certainly dont pay

if you informed them that you were on PAYE and had no other income or benefits thaen you should not have been sent SA returns. also find out where the alleged returns were sent to as it seems that they did not reach you and have clear grounds for appeal


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04th Jan 2014 15:28

If HMRC serve you with a notice to submit a return you are legally obliged to submit one. But on occasion they can be persuaded to withdraw the notice. It seems you went down the route of asking them to do this by writing to them. It's crucial to know therefore what response they made when you wrote to them. If they replied saying that although they noted what you said they still required you to submit returns, as they would have been perfectly within their rights to do, then you don't have a leg to stand on if you didn't submit them. If they didn't reply you probably have good grounds for appealing against the penalties.

You also mention interest. That is a different matter. What are they charging interest on? You say you had no liabilities.

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04th Jan 2014 16:06

Not convinced
They have a legal right to insist on a return but they must be fair and consistent. Do they ask all directors to fill in a return every year? If not, why you? Ask what percentage are asked to fill in a return and how they are selected.

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04th Jan 2014 16:11

Of course HMRC have a legal right to demand returns. Without it all tax returns would be voluntary.

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04th Jan 2014 16:17

John's is the best advice above

I would do what he suggests.

If the returns were as simple as you make out you would have been better advised to have completed the returns rather than risk the penalties.

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04th Jan 2014 16:33

it depends what was said by HMRC to the OP

if he was told not to complete he has adequate grounds for appeal if not he has less chance but he should appeal anyway on the gorunds that as he was on PAYE he thought that the telephone conversation had resolved the matter, Happy New year Peter & John and good health !  

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04th Jan 2014 16:46


Of course you should appeal. You could be spending half an hour to save £3,200. At a rate of £6,400 per hour I should say so.

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04th Jan 2014 17:22



You were on PAYE and the PAYE returns were  made to HMRC-- This would appear to an example of the incompetence rampant in HMRC  ( I am ex HMRC)


I suggest a formal complaint to HMRC then if this is unsatisfactory to the


I also suggest you establish the identity of the official responsible for the issue of the demands - (WARNING Letter signatory are a poor guide ofter an invention)


Consider legal action


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04th Jan 2014 23:05

Appealing is good

HMRC can be very contradictory and sometimes go against well established principles!

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By Tosie
05th Jan 2014 06:32


legally you should have completed the returns but clearly the amount charged is mad.I suspect it is a determination rather than a fine .You may find a letter to your mp works 

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05th Jan 2014 07:39

Not mad

@Tosie - the amount charged is not mad; these are just the standard penalties for late filing that everybody who is required to submit a tax return is subject to.

Assuming the OP has filed 2 years returns more than 12 months late then the standard cumulative penalty is £1600 per return, totalling £3200, which is what he has been asked to pay.

The OP has stated that he has been receiving notices to file for 3 years and has for whatever reason chosen (or been poorly advised) not to file them. It is likely that he has received many further reminders and not acted upon them.

Some of the comments here suggest an appeal is worthwhile and given the amount involved I suppose it certainly cannot hurt, but without written proof from HMRC that they have previously withdrawn their original requests for a return, I think the OP (or his MP) has little hope of getting the penalties overturned.


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By Tosie
05th Jan 2014 07:59


Thanks for comments I would like to ask you a question (with complete sincerity) on something that I have at the back of my mind. There used to be something in either in tax law or practice called equitable are you familiar with this ? I do not hear it mentioned nowadays and I wonder if it has ceased to exist. If still in existence this may apply in this case.

In the past I have encouraged clients to seek the help of their M.P. with good results.

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05th Jan 2014 10:39

PAYE penalties

I think you are thinking of equitable liability. this has ben replaced by special relief - see;

but it is only relevant where you have overpaid tax not where penalties re involved.

I would proceed as the_poacher and jonmillar suggest.

If it looks like going to tribunal my company Tribunal solutions would be happy to have a look at it in more detail for you.


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05th Jan 2014 12:58

Appeal asap

At the very least, the £900 element of the penalty is questionable and may well be struck down by the Courts.

You have absolutely nothing to lose by appealing now.

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By mhtax
05th Jan 2014 19:51

Same position

I had a client in a  similar situation. He had not submitted any returns since 2007/8 but has been on PAYE with no other sources all the time. I spoke to HMRC and the returns, and all consequential penalties, were cancelled. However, as you actually submitted returns I am not sure it will be that easy.    

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