Time To Pay and penalties

Second late payment penalty issued for 2015/2016 after TTP arrangements have been made for year

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I have recently taken on a client who was in a little bit of a mess and behind with his Tax Returns and payments.

His 2015/2016 was submitted in March and Time To Pay arrangements were made with HMRC in April 2017 to clear the tax due for the year along with penalties and interest to date, the first payment on account for 2016/2017 and expected interest over the Time To Pay Period.

I have just receive a second late payment penalty for him in respect of the 2015/2016 tax still outstanding at 31 July 2017. I was under the impression that further penalties for 2015/2016 would be suspended providing the arrangements were made before the penalty deadline and the conditions of the arrangement had not been broken as was the case. In addition, the taxpayer paid the second 2016/2017 payment on account by the end of July as HMRC had also requested.

Have I missed something or are HMRC correct in issuing the penalty? I accept the first late payment penalty in respect of the tax due at the end of February 2017 is correct as it was before the Time To Pay arrangements were made. I cannot seem to find the legislation but other information I have read in the likes of Tolley's Tax Guide seems to suggest that the penalty just issued should not have been.

Thanks for any contributions.

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By Rammstein1
19th Sep 2017 14:10

Further penalties should be suspended if your client has stuck to the TTP arrangement. You should appeal in writing.

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By K81
19th Sep 2017 16:00

I was under the impression that you have to get it in writing that the surcharges will not apply if TTP arranged & conditions stuck to.

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