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SA100 Late submission penalty - scope to reduce?

New client who had a brief s/e spell in 16/17 under CIS. Didn't complete SA but refund due.

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A contact of another client has come my way.  He has always been employed apart from a few months in 16/17 when he had a brief spell as a CIS subcontractor, hated it and went back to employment in another field.

He ignored the requests for a 16/17 tax return as naively thought that tax was being taken from him so didn't need to do one.  There is no reasonable excuse I can see. 

I have now done the return and a refund is due for the year. I have also done a 17/18 return which is employment only and no tax due.

He currently has £1,300 of late submission penalties issued.  The initial £100, the £900 of £10 daily penalties and a £300 6 month penalty.

FA2009, section 55 paragraph 17 (3) refers to where there are two 'tax-geared' penalties they must not exceed 100% of the tax due.  So, if he had received both a 6 month and a 12 month penalty, I understand we could have had them reduced to zero under this provision.

Is there any scope to reduce his six month penalty?  Or are we stuffed because he has not left it even later and so only has one 'tax-geared' penalty? If there is scope, how do I do this as the standard penalty appeal forms do not seem to fit.   If we're stuffed, are we better off waiting to file until after 12 months has passed?!

Any help very much appreciated, I have not had a client submit this late before so it is a first for me and I am struggling to find a definitive answer.

Replies (8)

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panda ketteringUK
By ketteringUK
18th Sep 2018 10:00

We've dealt with 2 appeals in recent months. One has successfully overturned and one still pending. Both for £1,200.
We are still waiting to hear about the other one. Single mum of 2 that briefly tried to be beautician. She had no other income apart from tax credits and child benefits.

What worked for us with Client A that client only received PAYE income and we appealed under Section 54 Taxes Management Act 1970.

Thanks (1)
Giraffe
By Luke
18th Sep 2018 16:07

Thanks ketteringUk, I will have a look at the provisions of that section in detail.

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Giraffe
By Luke
19th Sep 2018 13:19

Anybody else got any experience or views on this? Thanks

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Replying to Luke:
By SteveHa
19th Sep 2018 19:41

Just appeal. HMRC seem to be more forgiving with appealed penalties now than they used to be.

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Giraffe
By Luke
05th Nov 2018 16:18

Just a quick update to this - got a letter through from HMRC this morning allowing the entire appeal and cancelling all £1,300 of penalties!

One very happy client :-)

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Replying to Luke:
By SteveHa
05th Nov 2018 20:37

Nice result. If you hadn't submitted the Return you could have legitimately also tried a S8B withdrawal.

Thanks (1)
By Tim Vane
05th Nov 2018 21:52

As already alluded to I think you would have saved yourself and your client a whole lot of doubt, worry and uncertainty if you had just had both returns cancelled in the first place. The only upside of going through the process you have gone through is the refund for the earlier year - whether this refund was worth all the stress and worry to the client and whether it even covered your own fee is something only you can know. Next time, consider the withdrawal option as it is usually easier and safer, though I'm glad you have lucked out with the appeal this time - it does seem to be a bit of a lottery nowadays.

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Replying to Tim Vane:
Giraffe
By Luke
06th Nov 2018 10:28

Yes the refund covered my fee and left an amount which, while not considered substantial to most, the client was very happy with.

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