Appeal! Appeal! Appeal!

 

The value of HMRC tax penalties surged by 25 per cent between 2022 and 2023 to its the highest level on record, new data shows, as the government faces criticism for unfairly fining struggling businesses.

HMRC imposed £851m in penalties between November 2022 and October 2023, up from £681m in 2021/22, according to data obtained by accountancy firm UHY Hacker Young through a freedom of information request.

Penalties were also extended to nil or repayment returns that are received late, which Hacker Young said made it easier to trigger fines through simple paperwork errors.

Sean Glancy, a partner at Hacker Young, is quoted by City AM: 

“HMRC is often not reasonable in removing penalties for genuine errors – they sometimes seem to operate with a ‘shoot first, ask questions later’ approach. Once a penalty is issued, the process is quite draconian, however about half of penalties are withdrawn on appeal.”

Given the Post Office scandal, it is all too evident that people can neither trust automated systems nor state run bodies. As such, if on the receiving end of a penalty that you feel is not justified:

Appeal! Appeal! Appeal!

Tax does have to be taxing.

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Careless Tax Returns Cost Money!

Tax does have to be taxing.

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HMRC To Accept Bulk Appeals for Late Tax Returns Due To COVID

 

Tax agents and accountants will be able to send bulk appeals against late filing penalties for tax returns filed after 28 February due to COVID-19, HM Revenue and Customs (HMRC) has confirmed.

HMRC has previously announced that late filing penalty notices won’t be issued to anyone who was unable to file their 2020/21 Self Assessment tax return by 31 January, provided it was completed by the end of February.

The department recognises the pressure faced this year means that some individuals, businesses and their agents have experienced difficulties in meeting their filing obligations. As a result, COVID-19 may be accepted as a reasonable excuse for any appeals made against a late filing penalty for Self Assessment customers.

Agents representing individuals and businesses who have not been able to file by 28 February due to COVID-19 will be able to complete a bulk appeals form. The process will be available for appeals made against 2020/21 late filing penalties for Self Assessment customers, between 9 March and 6 May.

Agents can use the bulk appeals process, which will be available on GOV.UK, to record details of their clients’ appeals. Once completed, the form should be posted to the following address: Bulk Agent Appeals, HM Revenue and Customs, BX9 1ZH.

In order for the bulk appeals to be processed correctly, agents are required to do the following:

• each bulk appeals form can only be used for a maximum of 25 clients. Further forms can be submitted for additional clients
• bulk appeals forms must be sent to HMRC using the above address and if multiple forms are completed, these should be sent in separate envelopes
• all fields on the form should be completed for each client – without this, HMRC will not process the appeal for that client
• this form must only be used where the tax return was not filed by 28 February 2022 due to COVID-19. If the penalty is subject to appeal on other grounds, please use existing channels
• Find out more about Self Assessment

Individual appeals can still be completed via GOV.UK or by post – the postal route is for bulk appeals only. Appeals on behalf of one client should be filed using the SA370 or filed online. Appeals for a High Net Worth Unit case should be submitted via GOV.UK and should not be included on the bulk appeals form.

This service is only for a COVID-19 related reasonable excuse. HMRC reserves the right to carry out random checks to ensure the validity of the data or to seek further clarification as to the exact nature of the COVID-19 related reasonable excuse.

The bulk appeals facility is not available for 2020/21 Self Assessment late payment penalties, nor any other penalties.

Tax does have to be taxing.

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HMRC's Overzealous Late Filing Penalties

HMRC is being accused by tax professionals of being overzealous in its desire to fine people first, and ask questions later wrt late tax returns.

HMRC published figures, following a freedom of information request from Clifford Chance, that show it cancelled 270,000 late filing penalties in 2016 and 400,000 and 610,000 penalties in 2014 and 2015, respectively (more than a third of the total number of fines issued in both years).

HMRC said that most of these penalties were cancelled after taxpayers provided a “reasonable excuse” for submitting their tax returns late, such as the death of a close relative shortly before the filing deadline, or an unexpected stay in hospital.

The FT quotes HMRC:

“We don’t want penalties, we just want tax returns.

Taxpayers with a reasonable excuse for filing late or who have been taken out of [the self-assessment system] do not have to pay penalties. Taxpayers who file on time are not issued with penalties.” 

Dan Neidle, a partner at Clifford Chance who submitted the FOI, said he filed a self-assessment tax return on time at the end of December last year.

At the end of January 2018, he received a penalty of £100 from HMRC because his tax return “was not sent in on time”. Mr Neidle appealed the penalty, which was overturned by HMRC at the end of last month.

HMRC said in its letter accepting his appeal that the lawyer should “make sure that you send in your tax returns and pay the tax you owe on time in the future”.

 “If you do this, we won’t charge any penalties.” 

Cheeky bastards!

Mr Neidle said:

“The sheer number of penalties HMRC is issuing, presumably on an entirely automated basis, is sobering. The large number subsequently cancelled, and the harsh comments HMRC has received from the judiciary on a number of recent appeals, suggests something is going wrong. 

The question is how many people are ending up paying penalties that were unlawfully issued.” 

Mitch Young, co-founder of Fusion Consulting, which specialises in tax and IT advice, said a number of his clients had also received late penalty notices “incorrectly, even when they have submitted their self-assessment tax returns well before the deadline”.

The mistake was made either because of a system error with HMRC, or because the tax authority had issued duplicate unique tax reference numbers.

HMRC says it does not keep a record of why penalties are cancelled. In 2017, it stopped recording how many late return penalties were cancelled “due to costs and a lack [of] a business need”, it said in its response to the FOI request.

Mr Neidle questioned this decision, saying:

“If HMRC doesn’t track the number of penalties wrongly issued, how can they learn from their mistakes?”

I can answer that, HMRC has no interest in learning from its "mistakes"!

Tax does have to be taxing.

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The Danger of Calling Taxpayers "Customers"

Many taxpayers are sick to death of being called "customers" by HMRC, given that taxpayers have no choice but to "use" HMRC's "services".

However, calling taxpayers "customers" has come back to bite HMRC on the arse.

Step forward Mr Marc Capuano who appealed against the penalties that HMRC imposed under Schedule 55 of the Finance Act 2009 (‘Schedule 5 5’) for a failure to submit the 2011 - 12 self - assessment return (‘SA return’) on time.

The penalties that were charged can be summarised as follows:

(1) a £100 late filing penalty under paragraph 3 of Schedule 55 imposed on 14 October 2014 . 10
(2) Daily penalties totalling £900 under paragraph 4 of Schedule 55 imposed on 14 April 2015 .
(3) a £300 six - month penalty under paragraph 5 of Schedule 55 imposed on 14 April 2015.
(4) a £300 twelve - month penalty under paragraph 5 of Schedule 55 15 imposed on 13 October 2015.

The appellant had three separate part - time employments in the year 2011 - 12, and under each employment, he received the full personal allowance against his earnings, which totalled £9,222.89.

As a result of the personal allowance having been allocated against his overall 20 taxable earnings more than once, there was a net shortfall in PAYE deducted of £349 in 2011 - 12 . The PAYE underpayment could have been collected by adjusting the coding notice for the following year, or settled as a one - off payment.

For whatever reasons which are not on file, HMRC’s review letter stated that the PAYE underpayment 25 could not be ‘coded out’. Consequently, the appellant was served a paper return to file for 2011 - 12 on 30 June 2014. As the return was issued outwith the normal self - assessment cycle, it was due for filing 3 months and a week after the date of issue, which was 7 October 2014 .

The return was eventually filed electronically with HMRC on 31 March 2016, 30 which was almost 18 months after the return filing date .

The Tribunal notes that the appellant was also late in filing his return for 2010 - 11, and had incurred the maximum penalties in relation thereto of £1,600. The penalties for 2010 - 11 have been cancelled by HMRC on review, and is not a matter before the Tribunal.

The Tribunal ruled in Mr Capuano's favour, on the grounds that he had a reasonable excuse.

The Tribunal went on to note that the appellant’s experience of frustrated attempts to contact HMRC would seem to fit into the period of ‘staggeringly bad ’ delivery of customer service between December 2012 to June 2015 .

Without the knowledge and former experience in filing an SA return, the appellant quite understandably turned to HMRC for help. The taxpayers are supposed to be ‘customers’ of HMRC receiving a service too, but the service that could be expected by the appellant from HMRC failed to deliver at the material time.

Viewed in this light, the appellant’s delay in filing the return was excusable.

"The appellant would seem to be one of the taxpayers who had been failed by HMRC in this respect."

What goes around, comes around!

Tax does have to be taxing.

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HMRC Unveils Penalty Points System

HMRC recently published details of the penalties system for late submissions and payments under Making Tax Digital, confirming it plans to pursue a points-based model.

Under this model, taxpayers would receive a point every time they fail to submit on time. A penalty will be charged at a certain threshold, which will be dependent on the frequency of their submission obligations. After the threshold has been reached, a penalty will be charged for every subsequent submission failure.

The penalty thresholds put forward are:

- 2 points for annual submissions,
- 4 points for quarterly submissions and
- 5 points for monthly submissions.

One amendment to the model following the consultation is that penalty points will have a shelf-life and would expire after a period of good compliance.

Periods of good compliance were outlined by HMRC as:

- 2 submissions for annual submissions,
- 4 for quarterly, and
- 6 for monthly.

HMRC have said they will make penalty points and actual penalties appealable, and give taxpayers the option to claim a reasonable excuse for failing to meet a filing obligation.

Which may well open up a can of worms, given how many appeals are likely to be lodged as a result of the increase obligations on the hapless taxpayers under MTD>

Tax does have to be taxing.

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HMRC Stops Use of Personal Credit Cards for Payments - Bonkers!

CCH Daily reports that HMRC has confirmed that employers will not be able to pay PAYE penalties with a personal credit card from 13 January 2018.

However, it will continue to accept payments by company credit card or debit card, as well as BACS payments.

All payments must include the 14 or 15 character payment reference that begins with X and is on the payslip. Payments may be delayed if the wrong reference is used.

It will also not accept part payments by credit or debit card so any employers who are unable to make full payment by card will have to pay a different way, through telephone banking, CHAPS or Bacs using sort code 08 32 10, account number 12001020 via HMRC Shipley account.

Elaine Clark is unimpressed, and refers to HMRC's decision as "bonkers":

"Surely the role of HMRC is to collect tax!

If someone is willing to settle debts, regardless of the source of funds, isn't it HMRC's remit to collect the tax on behalf of the Government.

Otherwise what is their job?

Personally I think they HMRC have lost the plot or they have some sort of hidden agenda which we can all speculate about.

Whatever is happening this is just a completely bonkers decision which would have cost money to implement!"

I agree, on the face of it this decision makes no sense given that HMRC still accepts card payments.

Does anyone know why HMRC has done this?


Tax does have to be taxing.

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Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

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What is Solar Tax Investigation Insurance?

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To find out more, please use this link Solar Tax Investigation Insurance



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Tax Error Penalties Increase By 38%

In the year to April 2016, HMRC imposed 28,663 penalties against those whose inaccurate returns deliberately understated their income.

This represents an increase of 38% on the 20,740 penalties given out in 2014-15.

International Adviser reports that the figures, obtained by RSM using a Freedom of Information request, show that just 5,162 fines were given out in 2012-13, an almost six-fold rise in deliberate penalties over a period of four tax years.

Mike Down, head of tax investigations at RSM, is quoted:

"This spike in penalties suggests a marked change in attitude at HMRC, and it is clear that Inspectors are now taking a much harder line.

However, HMRC needs to be wary of the perception that they are engaging in ‘penalty farming’ and ensure they don’t unfairly penalise people who are not seeking to deliberately deceive". 

Penalties are levied according to the type of taxpayer behaviour that leads to an inaccuracy and on whether the tax adjustment is volunteered freely, or arises as a result of an HMRC challenge.

There are four categories of behaviour, ranging from ‘mistake’ despite taking reasonable care, failure to take reasonable care (or ‘careless’), to ‘deliberate’ with the most serious being an inaccuracy which is ‘deliberate with concealment’. The more serious the behaviour, the higher the penalty.

As Mr Down says, HMRC needs to be wary of penalising people who innocently made a mistake.

The ongoing increase in penalties levied indicates one or more of the following:

1 Taxpayers are becoming more dishonest.

2 HMRC are becoming more skilled at identifying errors.

3 HMRC are "penalty farming".

Your thoughts and opinions are, as always, very welcome.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC Changes Bank Details - Without Telling Anyone

Kudos to HMRC for forgetting to tell people that it had changed its bank account details, for firms which pay tax using IBAN, in February.

Can you guess what happened next children?

Yes, that's right, tens of millions of pounds in VAT and corporation tax has not been paid.

The Telegraph reports that large tax payments from a number of businesses have bounced and remain uncollected.

However, no problem as far as HMRC is concerned.

How so?

It has levied the hapless firms with penalty notices and, even better, has still not told them how to pay what they owe!

A senior executive within the tax department of a listed multinational company, who asked not to be named, told the Telegraph that the first he knew about his £6m VAT instalment being rejected was when the firm received a late payment notice.

“Our payment is now nearly a month overdue and we have still not received instruction from HMRC on how to pay. The way they have handled it is so shambolic, I would not be surprised if this is a much wider issue.

These cases may just be the tip of the iceberg as although there was some advance notice in a couple of HMRC publications, those notices did not include the vital IBAN number businesses need to make payments."

A HMRC spokesperson said: 

“HMRC’s move to a new bank will be invisible to most customers, who will not need to do anything different when sending payment to HMRC. Customers paying from overseas will need to update their payment details. Anyone experiencing difficulties in making payments should contact HMRC immediately.”

"Piss up" and "brewery" spring to mind!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance




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The Proof of The Pudding

It is interesting to note that HMRC claims that it will move away from from automated penalties, and take a common sense approach.

Could this be true? #HMRC could stop issuing automated penalties and take a common sense approach #really http://t.co/5hAQpvHw1S

— Rachael Singh (@RachaelSingh13) June 19, 2015

What caused this shift, and will it actually occur?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



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HMRC Rewrites History

On June 5th HMRC issued a press release about Self Assessment Penalties:

BREAKING NEWS: Self Assessment Penalties https://t.co/ftHkRMzBLC - PAYE Penalty regime to be clarified next week! #payerti

— PayeRti.org (@PayeRtiOrg) June 5, 2015

However, move forward a few days and blinkey, blonkey, blimey!

Perhaps not... HMRC have amended this press release removing reference to RTI penalty annoucement 'next' week i.e. this! What's going on?

— PayeRti.org (@PayeRtiOrg) June 10, 2015

Tax does have to be taxing.

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Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



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Automatic Fines

As per This is Money:

"Why does the tax inspector impose a blanket £100 fine for late tax returns?

I fell foul of the rule this year, when January 31 landed on a Saturday.>It was quite clear from the date my cheque was cleared that HMRC had received it by the Monday.Presumably, however, nobody was working at the weekend so they could not tell what had come by Saturday and what by Monday.

It is daft to fine people the same regardless of whether they are 24 hours, 24 days or even many months late.

£100 means nothing to large numbers of taxpayers but everything to little businesses like mine struggling to survive"

It transpires that, according to the site, after some weeks, a letter and several lengthy phone calls to HMRC it conceded that the late payment had a ‘reasonable excuse’ and removed the penalty.

That being said, leaving it to the last minute to pay by cheque was tempting fate to say the least!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

FOI Off!

The state likes to pretend that it is transparent, and that the voters have a right to know what it is doing on our behalves.

However, HMRC is a tad more opaque than some other organs of the state. Payrollworld discovered this recently, when it submitted a Freedom of Information (FOI) to HMRC regarding RTI penalty warning letters.

The request was relatively simple:

How many RTI penalty warning letters have been issued this year?

HMRC's response was a flat refusal.

For why?

It answered that it might "prejudice the collection of tax”:

“HMRC holds the information requested but it is being withheld. 

The exemption that applies here is section 31(1)(d) Freedom of Information Act 2000. This is the exemption that applies to information the disclosure of which would or would be likely to prejudice the assessment or collection of tax.

HMRC believes that disclosing the number of penalty warning letters issued could undermine the effectiveness of the penalty regime which relies to some extent on the deterrent effect of these penalties.”

Suffice to say, the real question that needs to be answered (but won't be) is:

How many erroneous warning letters have been sent?

Sadly HMRC is very opaque, the reason being not so much to maintain its "efficient" collection of tax but to hide its incompetence.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC Delays SME Late Filing Penalties

In theory, as from 6 October, HMRC were to have introduced late RTI filing penalties for PAYE for all companies.

However, the great laid plans of mice, men and HMRC are prone to fall apart. As such, it should come as no surprise top learn that the late filing penalty regime for businesses with less than 50 employees has been delayed until 6 March 2015.

HMRC have put a gloss on this, by saying that it will ensure a "smooth transition" etc.

"Employers with fewer than 50 employees will face automated in-year penalties for late real-time PAYE returns from 6 March next year. 

Those who employ 50 or more people will face penalties from 6 October 2014. 

HM Revenue and Customs (HMRC) will send electronic messages to all employers shortly to let them know when the penalties will apply to them, based on the number of employees shown in the department’s records. 

Ruth Owen, HMRC Director-General for Personal Tax, said:

”Real Time Information is working well. Our most recent figures show that over 95% of PAYE schemes making payments to individuals are successfully reporting in real time, and 70% say that it is easy to do.

“We know from our experience of rolling out of RTI that to ensure a smooth transition for our customers it’s best to introduce changes in stages. This will allow us to update our systems and enhance our guidance and customer support as needed. We know that those who have had most difficulty adjusting to real-time reporting have been small businesses, so this staged approach means they have a little more time to comply with the new arrangements before facing a penalty. 

“We believe this is the best approach for HMRC and our customers, as we all get used to the new in-year penalties.” 

Where employers believe they have a reasonable excuse for sending a return late, they will be able to appeal using HMRC’s new, online appeals process for automated penalties. This should speed up the appeal process for businesses and HMRC. 

In the run up to March 2015, HMRC will examine other ways to encourage employers to comply with the rules, in addition to financial penalties."

The reality is that this is the third delay. As Elaine Clark says, this is great news for SME's.

However, what the fark is really going on in the HMRC bunker?

Smells of cock up to me!


Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Whatever Happened To "Thank You"?

There is a splendid letter in today's Telegraph from a taxpayer ("customer" sticks in the throat), who is a tad upset that HMRC have used the word "penalties" 11 times in a letter covering the subject of tax returns.

The author goes on to say that such letters should in future include some words of thanks for those who have paid their tax.

Splendid!

Here is the letter in full:

"SIR – My wife and I have just received letters from HMRC informing us that it is time to complete our tax returns. In a single letter they manage to use the word “penalties” (for non-compliance) 11 times. 

Perhaps instead of threatening us with penalties, they would like to thank us for the amount of tax and National Insurance contributions we paid last year. 

May I suggest that they illustrate this with a pie chart showing a breakdown of how much we were allowed to keep and how much was spent on education, the NHS, police, defence, benefits, overseas aid, MPs’ expenses and interest payments on the national debt. I’m sure this would be very easy with their expensive new computer system. It would also be illuminating (and depressing) if they could show the running total we have paid in direct taxes since we started work almost 50 years ago. 

Graham Worthington
Lamothe-Goas, Midi-Pyrénées, France"

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Erroneous Penalty Notice

Accountingweb has an interesting query from one of its readers, in relation to an incorrectly issued £100 late filing penalty notice:

"We submitted a 2011/12 tax return on line 15/06/12 and obtained all the usual acknowledgements. This morning I received a £100 penalty notice for failing to send it on time. 
 
On query it turns out that it has now been cancelled but no explanation was forthcoming. 

I thought these were sent by the computer so forget human error but still the query Why??"

Given that the issuance of the penalty notice would have been automatic where the system determined that the submission was late, but given that the submission was made online and evidently (because the penalty was cancelled) on time does anyone have any thoughts as to why/how the system could have issued an automatic penalty incorrectly?


Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

PAYE Returns For 2102/13 Not Submitted

HMRC have flagged that a "very small proportion" of employers, using products from an unnamed software supplier, have received penalty warning notices from HMRC because their P35 Employer Annual Returns for 2012/13 have not been received.

The penalty notice will be cancelled if the employers meet certain criteria, and submit their P35 by 25 June.

Have any loyal readers received such a penalty notice, or been affected by this issue?

Here is the full text of the HMRC news release:

"We are aware that a very small proportion of employers - using products from one software provider - have received penalty warning notices from HMRC because they have not submitted their P35 Employer Annual Return by 19 May 2013 for the year 2012-13.

This issue impacts employers who:

• use the product of one particular software provider
• were not in the RTI pilot
• completed their 2012-13 end-of-year returns after 6 April 2013
• used 2012-13 PAYE Real Time Information software to complete their end-of-year returns (forms P14 and P35)
• sent an Employer Payment Summary to HMRC instead of a P35 end-of-year return

A penalty warning notice has been issued because HMRC has not received a P35 from those employers. 

This issue does not affect employers who took part in the RTI pilot. 

The software provider will email customers affected by this issue over the next few days with specific guidance on how to file their P14/P35 for 2012-13.

We are working with the software provider to identify all the employers who are affected by this issue. We appreciate that employers are still getting used to operating PAYE in real time and that mistakes may occur. 

Employers who receive a penalty notice and meet the specific criteria above should follow the guidance provided by their software provider and should submit their P35 return within the next 14 days (by 25 June 2013).

HMRC will cancel the penalty warning letter in this specific scenario where the employer submits their P35 by 25 June 2013. 

Penalties will still apply to any employer in these circumstances who does not submit a P35 by this date.

Employers affected by this specific issue do not need to contact HMRC either via phone or in writing."

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Reasonableness

Accountingweb, in an interesting article, reports that according to a recent Freedom of Information request, there were 13 tax penalties for deliberate behaviour and 3,208 for failure to take reasonable care in relation to self-assessment returns in 2010-2011.

In 2001-2012 the figures rose to 49 and 9,315 respectively. Figures for reasonable excuse are not available, but the published tax tribunal decisions show that such penalties are increasingly common.

Therefore, in the opinion of George Rowell (a barrister at St John’s Chambers specialising in tax disputes), the concept of reasonableness lies at the heart of the new penalty system.

However, the penalty legislation has only a partial definition of reasonableness.

It does not include:

• Insufficiency of funds unless the insufficiency is attributable to events outside the taxpayer’s control, or
• Reliance upon a third party, unless the taxpayer themselves still took reasonable care in relation to his own acts and omissions

Additionally, where the taxpayer has discovered a careless error, or where a reasonable excuse has finished, the taxpayer will still have a defence if he/she remedies the error or failure within a reasonable time thereafter.

As to matters outwith the above, case law and HMRC guidance need to be relied upon.


Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Ker Farking Ching!

Sky News reports that between 650,000-850,000 taxpayers are set to be hit with daily fines by HMRC, after failing to file their tax returns for 2011/12.

HMRC sent out automatic £100 penalties to around 850,000 people by February 20, the defaulting taxpayers were then given three months to file their accounts.

However, it is believed that hundreds of thousands have still to complete their forms.

As I recently noted, as from May 1 a new daily fine of £10 will be levied on those who have not filed their returns.


Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Mayday Mayday!

A Mayday warning from HMRC about their £10 per day penalty charges for late online filing:

"If you haven’t sent in your 2011/12 tax return online, be warned – you’ll be hit with more penalties from next month if you still haven’t filed. 

From 1 May, HM Revenue and Customs (HMRC) will charge a £10 daily penalty for each day your online return is late, up to a maximum of 90 days. This is in addition to the initial £100 late-filing penalty for missing the 31 January filing deadline.

For paper returns, daily penalties started on 1 February, as they were due by the earlier deadline of 31 October. So don’t send a paper return now, as it will trigger an amount equal to, or close to, the maximum daily penalty charge of £900.

Looking ahead, further penalties of at least £300 (or 5 per cent of the tax due, if that is more) will be issued for returns that are 6 and 12 months late.

Anyone who’s received a late-filing penalty, hasn’t yet sent a return, but thinks they don’t need to be in Self Assessment, should call HMRC on 0845 900 0444. If HMRC agrees, the return and any penalty will be cancelled."

You have been warned!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"