Hi all
Please accept my gratitude for reading my question.
I have recently been approached by a client who started trading in november 2011 but still not registered for self assessment and never got around to consulting an accountant in the past, yet he told hmrc in november 2011 that his self employed and started claiming working tax credits and child tax credits.
I have consulted hmrc's agents line but not received satisfactory answre to whether he will receive just a late disclosure panalty of £100 or all the usual penalties associated with late submission of self assessment for 2011-12.
Any suggestions of recommendations are appreciated.
Thanks
Ali
Replies (7)
Please login or register to join the discussion.
Late registration penalty
He will receive a penalty for late registration of self employment.
His first Tax Return will be for the year ended 5th April 2012. The normal filing date for this Return is 31st January 2013 or 3 months from receiving from HMRC a Notice to File the Return.
Maybe
It depends whether or not your client has in fact registered for self employment.
You say that he told HMRC on the phone in November that he had started his own business. I suspect that he didn't actually register. So register him now, pay the penalty for late registration and file his 2011/2012 Tax Return within 3 months of receiving the Notice to File. No SA penalty.
If he did register in November 2011, then he will have a UTR and, more importantly, he will have received a Notice to File a Tax Return for 2011/2012. In which case he is liable for a £100 penalty plus daily penalties of £10 from 1st May 2013.
There is the outside chance of the best of both worlds
he was treated as registered and has a UTR, but HMRC forgot to require a return. In which case no late registration & no late filing so long as the 11/12 is submitted within 3 months of being requested by HMRC. Of course proving same will likely be nigh on impossible.
Do you / does he have any evidence of advising HMRC he had commenced s/e?
Rules have changed slightly on failure to notify penalties...
A little late, but I hope it helps.
HMRC changed the rules back in 2010, the £100 fixed penalty and the 3 months window no longer applies....
Have a look at the following link from HMRC.
http://www.hmrc.gov.uk/about/new-penalties/faqs.htm#40
With respect I would be getting on with the accounts and returns and getting everything up to date as soon as possible. Worry about penalties when you receive the demands. They should be the least of your concerns at this stage as there is nothing you can do to affect them.