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Self Assessment surcharges

20th Jul 2009
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Jonathan Mark Kaye posted a query on 28 February 2008 (see 180088). A client’s cheque for the 2006/2007 SA liability had arrived at his office on 28 February, having been posted 1st Class Recorded Delivery on 26 February.

If the firm had sent the cheque to AO Shipley by post it would not have arrived until 29 February, and a surcharge would have been imposed. A time to pay arrangement could not be entered into, as the tax return itself had still not been submitted.

Jonathan wondered if there were any local HMRC offices in London that would accept the payment and recognise it has having been received on 28 February 2008.

Trish replied that it was possible. She had the same problem but was not in London. She had just spoken to Slough Tax Office, who confirmed that the cheque could be hand delivered to Reading, and as long as it was date stamped 28 February 2008, it would be accepted as received on that date. She had had a similar problem on 31 January 2008, and the same procedure was successfully negotiated.

Patrick suggested that the cheque should be paid into a bank, but was not certain that this would avoid the surcharge. He stressed that the client should be billed for the extra time involved.

Geoffrey Wolf from N20 gave two London addresses. The HMRC office at Gateway House, Regents Park Road, London N3 has a letter box at the rear of the building. He suggested putting the date and time of delivery on the payslip and on the envelope and keeping a copy of both. An alternative HMRC address was Capitol House, 794, Green Lanes, Winchmore Hill, London N21 2ST.

Stephen Quay asked whether the client could not be persuaded to pay by debit card from the Bill Pay section of the HMRC website. The payment would be logged as received straightaway. If the client was not computer literate, they could visit Jonathan’s office and complete the transaction from there.

As it was Leap Year in 2008 Tax Man asked whether a payment made on 29 February would avoid the surcharge. TBB confirmed that it would not. The legislation is quite clear that payment must be received by HMRC within 28 days of 31 January.

Victoria Hearsey commented that she believed that she had read that HMRC allowed payments to be received by 1 March before actually issuing a surcharge. No one confirmed this view, and it would be interesting to have comment on this.

There are a number of issues arising form this query. First, there is no doubt that HMRC are receiving an enormous income from fines and penalties for late submission of returns and late payment of tax. This is not the forum to debate whether this procedure is ethical or moral, but it is fact.

Second, Stephen Quay’s comment underlines the fact that there is pressure on businesses and private individuals to embrace computer access to HMRC both as regards submission of returns and payment of tax. It is unrealistic for all UK citizens to be able to comply with this.

Finally one comes to the perennial problem of clients. We live in an imperfect world and with the best will in the world some clients are always going to be late with accounts production, tax returns and tax payment. Some practitioners penalise such clients with increased fees, and Patrick’s suggestion that Jonathan should bill the client in this instance for the extra time is a good one.

Replies (2)

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By puzzel
22nd Jul 2009 16:07

Where to Pay
Once remember something like this with VAT and not having a bank account. Client wanted to pay in cash, but how.
Having spoken to Customs & Excise they stated that the liability could be paid at the local Post Office and is deamed as paid in full on that date, no need to pre-pay to arrive in time.

Maybe this could be the same for other liabilities due?

Worth someone looking further.

Oh by the way, forget about the money laundering issue, the chap ran a chinese takeaway and only took cash for sales. A very sqeaky clean man.

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By leon0001
23rd Jul 2009 15:45

Closed office
Gateway House tax enquiries office is now closed. HMRC have moved out.

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