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Self Assessment tax return late

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Client came to me in October his Self Assessment for 2018 was late so we did his self assessment for 2018 and 2019.  

It was very difficult getting information from the client - we had filed the 2018 self assessment tax return in December but even we had prepared the 2019 tax return and sent a draft version to the client. We didn't ask for approval and somehow it got missed.  The client never chased for it either nor sent any HMRC notices or penalties for either 2018 or 2019.

Now Ex-client brough it to our attention a few weeks ago and we have filed.  This is the first time in 15 years we have missed a filing for any our client so little dismayed this has happened.  Client hasn't been sent any HMRC penalties yet but his claiming that should he get any penalties  for 2019 he will pass this onto us to pay.  I thought the £100 late filing penalties would have been sent in March ?

Also what is HMRC current stance on penalties appeals as in the past they have reduced my client penalities.

Replies (12)

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By Paul Crowley
11th Sep 2020 18:35

Change in the rules so that Humans no longer need to consider the penalty, the computer can just send out.
But worth a try as HMRC staff may still choose to mitigate.
BUT I agree former client had plenty of time to resolve after the first £100. We get copies of the penalties in paper.
We will not act without agent authorisation, helps with this type of issue.

No penalties so far may mean that returns not issued, so 2018 and 2019 would be voluntary.

I am a bit [***].(An4l) The software I use has a status report, which I use and PDF each month.
If we are not replaced as agent on HMRC I only delete after at least two more submissions made

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Replying to Paul Crowley:
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By Jim100
11th Sep 2020 19:45

Thanks Paul for the reply. When is the first £100 penalty normally sent out by HMRC ?

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Replying to Jim100:
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By Paul Crowley
11th Sep 2020 19:54

Dated 20 March 2020 on a former client who every year starts but does not succeed in filing by himself

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By SXGuy
11th Sep 2020 19:00

The draft tax return you sent your client. Was it clearly marked draft?
Would the client have been aware it needed approving before submission even if you didn't inform client to give it?
Can you log on the agent account and check if a penalty has been issued and if so, did the client ignore it?

Id be asking these questions first, if you feel it would have been obvious to the client they would need to approve before submission either because they have always had to, or because the words DRAFT would have been written across all pages of the tax return you sent them, id probably argue that they would have been fully aware that approval was needed regardless and is not a valid reason to pay any penalties on their behalf. I'd probably also use the example that their 2018 return was way overdue and so you reasonably thought that they were late with approving the 2029 return also.

Personally I find it disgusting that someone can be the type of you have to chase and chase for info, get to the point where they are 12 months late with their tax return, and then have the cheek to suggest you pay their penalties because you failed to state the obvious to them.

Others may be abit more professional than me, but I'd probably see red in your situation.

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Replying to SXGuy:
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By Paul Crowley
12th Sep 2020 11:55

My business partner is 10 years younger per calendar, but 10 years older in accounting habits. Always sends to client in paper and expects a signed paper copy back.

Even then the last week for him is phoning all the cannot be bothereds.

I agree system has been around a long time. We are required to get specific demonstrable authorisation to file each return before filing. Former client did not authorise. End of story

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Replying to Paul Crowley:
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By memyself-eye
11th Sep 2020 19:38

Paper? Paper?
who uses that anymore....

I used to work in banking where folks would deposit little tin boxes at the bank to put in the safe: (safety deposit boxes..ho.. ho)
We would hand write a receipt which was then typed and post it with an accompanying letter politely asking the customer to sign the carbon (remember that?) copy of the receipt and return it to the bank in the SAE provided.

No one ever did.

Cannot be bothered = what a waste of time.

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Replying to SXGuy:
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By Jim100
11th Sep 2020 19:59

No it was not marked draft. I can't logon as I have been removed.

I had emailed the 2019 tax returns but mentioned I required the UTR number

Client sent the UTR number after chasing a few times.

I then sent the 2018 tax return asking for approval. I never sent the 2019 tax return for approval. Not sure why though.

I am so tired of this ex-client and feel like giving him some home truths. Though I need to be careful not to cross the line as he would be more than ready to complain to my accountancy body or take legal action.

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By Matrix
11th Sep 2020 20:16

What were you engaged to do and have they paid you for filing this return? Why did they leave?

I am a bit overkill, I check in my tax software, PM software and HMRC online that I haven’t missed any. Although this year will be harder as so many new ones and a 2020-21 one today so I do rely a lot on PM software.

Review your systems/controls and revise as necessary.

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By adam.arca
12th Sep 2020 08:30

We’ve probably all been there, I know I have. And if you’ve gone 15 years without missing a filing, then you should probably be patting yourself on the back rather than worrying about the one that got away.

That said, I think you are negligent here but so is the client and he needs to be reminded of his contributory negligence in no uncertain terms. Something like this (in slightly more professional terms):

“Look, mate, you were a PITA and, because of that, you went right to the bottom of my [***] pile. Hands up, that’s my fault.

But appointing me as you agent isn’t an excuse for you to turn your brain off: you still have a responsibility for minimising your loss and in fact the responsibility for ensuring that deadlines are met is yours and yours alone in law. So what did you think I sent you that tax return for? Because it wasn’t to use as bog paper. So that’s your fault. Take it like a man and stop bleating.”

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By Calculatorboy
12th Sep 2020 17:22

Yiou need to tighten up procedures , include standard clause you will file when approved and returned to you and no reminders will be sent

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By Calculatorboy
14th Sep 2020 00:20

Perhaps a lesson not to take on new clients who are already late..its a red flag

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By Paul D Utherone
15th Sep 2020 17:52

...and once again giving him the response in Pressdram v Arkell springs to mind, if only as an "I wish I could send this" :)

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