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Where Taxpayers and Advisers Meet

Late Filing Penalty

CG
Posts:202
Joined:Wed Aug 06, 2008 3:33 pm
Late Filing Penalty

Postby CG » Thu Jun 14, 2018 6:54 pm

Hi

I am helping someone who wants to appeal late filing penalties for 2014/15 and 2015/16. The notice to file these was issued in February 2018 and the penalties are due by 21 June.

This lady registered as self employed in February 2018 but put her start date in the 2014/15 tax year, which has prompted the issuing of the 2014/15 and 2015/16 tax returns. This was an error as in fact she only started as self employed in June 2016. Prior to that, she left school in 2014 and did a variety of different types of casual work, totalling approximately £3,000 in 2014/15 and £4,500 in 2015/16.

To complicate matters, she started a limited company of which she was director between March and October 2015 and now just does consultancy work for them. Might the fact she was a director in both the tax years in question be a reason for HMRC to refuse our appeal?

Many thanks for any advice.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Late Filing Penalty

Postby bd6759 » Fri Jun 15, 2018 9:25 am

Has she filed the returns? If not, why not, and if so, why were they late? (If the returns were issued in Feb, the filing date would be in May.)

CG
Posts:202
Joined:Wed Aug 06, 2008 3:33 pm

Re: Late Filing Penalty

Postby CG » Fri Jun 15, 2018 9:44 am

The returns have not yet been filed, they are late because she didn't know what to do and is only addressing them now.

As she caused them to be issued by assuming she was self employed when she was not, but she was a director, is her appeal likely to be successful?

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: Late Filing Penalty

Postby robbob » Fri Jun 15, 2018 12:00 pm

Ignoring the Directorship complication below HMRC will hopefully cancel the tax returns that are not needed if you explain that there was no requirement to file a return, if the returns are cancelled the penalties are automatically withdrawn and the problem goes away. This is always the best route to try to go down so you don't have to be subject to the nightmare that is the appealing process.

It would also make sense to contact the class 2NI team first to request they amend the start of trading date on their systems to the correct date so that when you speak to the tax return team they are have access to the fact that the start date was in 16/17 tax year.

Hmm the Directors thing may complicate things , best bet is to be completely silent on the directorship bit when contacting hmrc requesting the return be withdrawn, as HMRC officers more often than not incorrectly state that a Directorship means a tax return must be issued and therefore they may not cancel the return if they are made aware of the Directorship. Unfortunately they have the right to insist the return is filed if they want to and they quite often do insist a return is filed for directors just to be annoying.

CG
Posts:202
Joined:Wed Aug 06, 2008 3:33 pm

Re: Late Filing Penalty

Postby CG » Fri Jun 15, 2018 12:18 pm

I have been told it is too late to cancel the tax returns because they are too old for HMRC to cancel the notice to file. They said the only option was to file the returns and appeal the penalties.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Late Filing Penalty

Postby bd6759 » Sat Jun 16, 2018 10:59 am

I'd go back to HMRC and ask to speak to someone with discretion and authority. The legislation says 2 years after the end of the year to which the return relates, or any such time as HMRC allow. Given the returns were only issued 3 months ago, you should have good case.

Explain that she made a mistake and the s/e started in 2016-17 and that return has bene submitted (hasn't it?).


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