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Where Taxpayers and Advisers Meet

NRCGT return

etf
Posts:1278
Joined:Mon Nov 02, 2009 5:25 pm
Re: NRCGT return

Postby etf » Fri Aug 11, 2017 10:53 am

I have copied below the NRCGT return late filing statistics for the five month period to 30 June 2017. They show nearly one third of all returns submitted in this period were filed late. The actual percentage must surely be higher with individuals either still unaware of the filing obligation or incorrectly having decided to attempt to fly under HMRC's radar given the draconian penalty regime in place.

I can confirm that HMRC holds some information which falls within the scope of your request. NRCGT data is now only available on a quarter end basis. For the five month period 1 February to 30 June 2017 the information you have requested is as follows:

 The number of NRCGT returns filed = 6,897
 The number of the above returns that were filed late = 2,159
 The number of late filing penalties charged = 1,494

There is a difference between the second and third figures due to internal process delays. HMRC is currently processing those NRCGT returns received late and will apply penalties, in accordance with the relevant legislation, in due course. Penalties can be appealed where there is a reasonable excuse for filing the return late.


For those of you who have not yet read Lee Sharpe's humorous summary of the birth of this new reporting regime, enjoy the following:

Hey, chaps! I have an absolutely whizzer idea! Let’s make taxpayers fill in forms whose only purpose is to tell us about other forms they’re going to be filling in later. So if they don’t tell us about the forms they’re going to be filling in, then we can penalise them for not filling in the first form about the second form. But to make this really work, we need to make this new form about something really obscure, so that nobody will realise the new form applies to them until it’s too late. Now, all we need is some new tax measure that quietly overturns principles that have applied for decades…”

Sadly for 2,159 people in the 5 month period to 30 June 2017, the reality may be a £700 penalty which could have been £1,600 but for public pressure. Mr Hammond, surely you can improve on this mess left by your predecessor?

etf
Posts:1278
Joined:Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Wed Sep 20, 2017 9:25 am

My thanks to my former retired boss for bringing the following decision to my attention:

Appeal number:TC/2017/04089 CAPITAL GAINS TAX – non-resident CGT return – penalties of £1,600 for failure to file return within 30 days of completion of house sale – whether disposal in 2015- 16: not proved, so penalties not due – alternatively, whether assessment met requirements of paragraph 18 Schedule 55 FA 2009: no, but s 118 TMA applies – whether paragraph 4 Schedule 55 penalties properly imposed: no, Donaldson applies and no paragraph 4(1)(b) HMRC decision – whether reasonable excuse: yes – whether special circumstances decision by HMRC flawed: yes – decision that there were special circumstances substituted – penalties cancelled.

Perhaps the decision makers read Lee Sharpe's attack on the NRCGT penalty regime which penalised many people who were simply unaware of their filing obligation. It must be hoped that HMRC will now refund all penalties issued and not compound the mistreatment of those affected by lodging an appeal against this decision.

darthblingbling
Posts:698
Joined:Wed Aug 02, 2017 9:09 pm

Re: NRCGT return

Postby darthblingbling » Wed Sep 20, 2017 9:59 am

Here's more recent decision.

http://financeandtax.decisions.tribunal ... C06109.pdf

Same conclusion, but the wording of the document and judgement goes a bit over my head! But the initial appeal was basically 'I understood that I should report the disposal, but as far as I knew this should have been done on my self assessment tax return for the tax year as there is a big CGT section!'.

Think it was also mentioned that because you can't file by paper, it goes against other legislation that states giving statutory notice to HMRC is done by paper by default.

I also love this statement from the judgement section:
I am sure that every December in the past few years the appellant, like many
other inhabitants of Rozelle, NSW, Australia, has been agog with excitement waiting
for the British Chancellor of the Exchequer’s Autumn Statement. How much more
relevant must it be to their tax affairs than anything the Australian Treasurer has to
announce.

Lambs
Posts:1611
Joined:Wed Aug 06, 2008 3:15 pm

Re: NRCGT return

Postby Lambs » Tue Oct 17, 2017 5:45 am

Er, nope. It's the same decision.

ETF, did you realise you were quoted in the case? Your efforts on the TaxationWeb forum and on the ICAEW's Tax Faculty forum have been referred to in the case notes?

New article out on this:

https://www.taxationweb.co.uk/tax-artic ... lties.html

Best regards, all

Lambs

ps Gold Star for ETF, I reckon.

darthblingbling
Posts:698
Joined:Wed Aug 02, 2017 9:09 pm

Re: NRCGT return

Postby darthblingbling » Tue Oct 17, 2017 9:54 am

Oops

etf
Posts:1278
Joined:Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Wed Nov 01, 2017 1:25 pm

In the three month period to 30 September 2017:

3,348 NRCGT returns were filed.
1,102 of the above returns were filed late i.e one third of all returns filed in this period were late.
Late filing penalties were charged in 955 cases.

In addition ,565 late filing penalties for returns filed prior to 1 July 2017 were charged during this period.

Hopefully, some of the 1,520 individuals who received penalties in the above quarter will write to their MPs to complain against this flawed reporting system/consider lodging an appeal. Not everyone entering the lion's lair receives a Scott Baldwin result, as Rachael McGreevy bravely demonstrated.

Kind Regards

etf

PS Another very good article from Lee Sharpe on this topic-thanks Lambs for the link-pleased to confirm I managed to avoid awarding him just 1 star /5 this time.

LSH
Posts:25
Joined:Mon Nov 06, 2017 5:11 pm

Re: NRCGT return

Postby LSH » Mon Nov 06, 2017 5:56 pm

Thanks so much to everyone on this thread. I feel like at least I've found people talking sense on here (and registered on here today just to allow me to post).

I too am suffering like many others in that I sold my flat in the UK in July 2015 but assumed any capital gains or costs would all be taken care on in my 15-16 SA filing which would be due by 31 Jan 17 as normal. Only when doing that return in January did I see the requirement to file within 30 days of disposal of a property in the UK. I've been living in Africa for nearly 10 years and so unsurprisingly was not aware of this new law. It staggers me that HMRC didn't think of sending out warnings re the law change to all non residents who also fill in the UK rental income forms. When I sold the flat, no-one at the estate agents or the conveyancer told me this was a requirement either and they knew I lived outside but from reading all the info on here and the links it seems like nearly everyone was blissfully unaware.

Anyway, I duly filled in the NRCGT filing in January 17, which in any case showed no tax was due as there was no profit or loss (the flat was under offer in April 15 when the new law came out and was sold for the offer price to the same buyer in July 15). But lo and behold, I have now received a letter (which is so late in arriving the appeal date has supposedly passed by almost 2 weeks, though I am appealing anyway) and I am being fined a fixed penalty of £700 in total. I see that I am 'lucky' given they have now stop applying the daily penalties they'd done previously, though I am still gutted. I was also under the impression that HMRC have now removed the requirement to do the NRCGT filing if it was a no profit no loss situation and that this decision was backdated to April 2015. So not sure why they have still fined me (unless I have interpreted that 12ZBA change incorrectly??).

Can I just ask something - people are saying that we should contact MPs about this if we are fined. I've sent my appeal to HMRC today but having been outside the UK for such a long time, who would my MP be? Would it be the same constituency as where I used to live (which is the same place as the flat I sold actually). Also - would it be advisable to pay the fine now and hope that it is repaid by HMRC if my appeal is successful, (meaning to avoid any additional interest starting to accrue on it)?

I really appreciate any advice anyone can offer. Never posted on a forum before so apologies if there is a protocol I haven't followed

rbk123
Posts:26
Joined:Tue May 30, 2017 1:27 am

Re: NRCGT return

Postby rbk123 » Thu Nov 09, 2017 10:12 pm

LSH, your case is just like ours and we are not alone. We have taken HMRC's appeal and review process as far as we can and have now appealed to the First Tier Tribunal as indeed Rachel McGreevy did. Under Section 9 of Form T242 "Making an Appeal : Explanatory Leaflet" we have made every effort to remedy our situation with HMRC and have our NRCGT Late Filing penalties cancelled. We even cited Rachel McGreevy's case which, in essence, is the same as ours and gave HMRC another chance to cancel our penalties but all HMRC did was send us curt letter telling us to appeal to the independent Tribunal.
In addition, we asked for information under FOIA on the number of cases where Late Filing penalties were cancelled due to the client being ignorant of the process for notifying NRCGT. HMRC confirmed they have this information but we can't have it because it would take too long (more than 3.5 days or £600) to search for it. We refined our request to how many they found in these time and cost restraints but this too was refused. We have seen at least two cases on this Forum and others elsewhere stating penalties cancelled with ignorance being the "excuse" and feel even one case would set the precedent to cancel our penalties and, indeed, all penalties for similar cases. We have appealed HMRC's refusal to the FOI Review panel which is part of HMRC so are not hopeful of a positive outcome.
We wrote to our MP, this being the MP in the constituency where we last lived and are still registered to vote and he wrote to the Minister concerned who passed our letter onto Jon Thompson, CEO of HMRC. This is who we have been corresponding with, by e-mail, since our second review was rejected.
We would suggest writing to your MP, addressing all HMRC correspondence to Jon Thompson (jon.thompson@hmrc.gsi.gov.uk) and DO NOT pay the fine.
Finally, in our appeal, we have asked the judge to consider compensation, given the stress and anxiety caused and the time we have had to commit to this issue over the past twelve months. In the fourteen years we have been out of the UK and before we left the UK, we have never been late filing any Tax requirement, never been fined so we find it appalling to be fined in this manner especially as HMRC have confirmed our computations that no NRCGT was due on any of the three properties we sold. Take heart and good luck!! Fight the ba****rds................. and how much of taxpayers money is HMRC spending to defend the indefensible!!

rbk123
Posts:26
Joined:Tue May 30, 2017 1:27 am

Re: NRCGT return

Postby rbk123 » Thu Nov 09, 2017 10:24 pm

We also meant to say a big "Thank you" to TaxationWeb for keeping us updated on what is going on with NRCGT and giving us hope we are not alone in this fiasco!!

Lambs
Posts:1611
Joined:Wed Aug 06, 2008 3:15 pm

Re: NRCGT return

Postby Lambs » Thu Nov 09, 2017 11:05 pm

R, L,

Good luck with your appeals. I have no doubt that pretty much everyone on TW feels the same.

Kind regards,

Lambs


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