Penalties for late filing of NRCGTN

[JNDennis]

In 2015 my husband and I sold two UK properties while we were living in France. The NRCGTN procedure was introduced shortly before the two sales, but unfortunately we were totally unaware of this. In July 2016 we returned to live in the UK. In August I rang HMRC to ask if I would still have to use the third party software that I had used to do my UK tax returns while living in France when I did our 2015-16 tax return and CGT return. I was told that I would and I was asked if I'd submitted a NRCGTN. This was the first time I'd heard of this return. I went on line and looked at the forms but found them very confusing so I asked an accountant to do the returns for us. HMRC then imposed fines totalling £6400 on us. We appealed but today we've had the appeals turned down. HMRC's position is that ignorance is no defence. We have no CGT to pay and the fine is simply because we were late in filing a return that we did not know existed, even though we dealt with them as soon as we became aware. I have read on this forum a post from someone who successfully appealed on the same grounds, i.e. that they did not know about the new procedure. If it seems that HMRC is not being consistent. Can anyone offer any advice.

[maths]

I, of course, don't read all posts and can't recall the post to which you refer where a successful appeal was lodged. Someone else may know the post.

As far as the legislation is concerned there appears to be no exemption from a requirement to lodge a Return except where the disposal is one which qualifies under the TCGA legislation as a "non gain/no loss" disposal; probably inapplicable here.

[etf]

I'm very sorry to learn you have had these penalties levied on you. Another two examples of individuals who have tried to comply with their UK tax return filing obligations and in return have been charged penalties of a magnitude that will only encourage non-compliance.

If the system worked how I believe it was originally intended, you would each have received initial £100 late filing penalties and a warning that daily penalties would follow if the returns remained outstanding. You would then have filed the outstanding returns and that would have been the end of the matter.

Despite publishing statistics that suggest 80% of post is dealt with within 15 working days, the NRCGT appeal system is in meltdown with evidence to suggest in some cases it is taking 5 months for a decision to be reached. I have copied below a link which details examples of cases where appeals have been allowed including one in a situation similar to your own. I would write to your MP and continue to challenge these penalties.

HMRC are supposed to treat all taxpayers fairly and not discriminate between classes of taxpayers where to do so would be conspicuously unfair. They have already announced late filing penalties will not apply in the first year of Making Tax Digital (because it takes time for the public to become aware of what they have to do), but no such concession has been offered in respect of the NRCGT filing requirement. In my opinion that is discrimination on a level with the members at Muirfield Golf Club who due to public pressure have recently seen sense. Hopefully Mr Hammond will realise that when law abiding taxpayers are receiving fines of £6,400 the system is broken and needs fixing.

https://ion.icaew.com/taxfaculty/f/tax- ... gt-penalty

Good luck!

etf

[JNDennis]

Thank you eft, we have asked HMRC to review our failed appeal and if that also fails we will ask for a tribunal. Our MP wrote to HMRC on our behalf and they say that they will refund some of the daily penalties but so far we have not heard anything from them ourselves so we do not yet know by how much this will reduce the the fines.

[etf]

Thanks for the update which will hopefully encourage others to write to their MPs and receive similar equitable treatment.

KR

etf