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NRCGT return

etf
Posts: 447
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Sat Jan 06, 2018 8:20 pm

I should have referred to the muddled nature of the return rather than used 'lie' which is too strong. e.g. individuals have to complete sections with a title 'For funds and certain companies only' and the next section states to 'ignore this section if.....', but then contains a compulsory question that everyone has to complete.

etf
Posts: 447
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Thu Jan 18, 2018 12:03 pm

For the three month period 1 October to 31 December 2017 the information you have requested is as follows:

 The number of NRCGT returns filed = 3,896
 The number of the above returns that were filed late = 1,336
 The number of the above cases issued with a late filing penalty = 1,177

 The number of late filing penalties charged in relation to earlier returns = 344

34.29% of NRCGT returns filed late in the last quarter!

This statistic will presumably come as a huge shock to Judge Mosedale who believes these filings should not be a problem for the public-just phone HMRC's helpline.

etf
Posts: 447
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Thu Jan 18, 2018 4:33 pm

I currently have TalkSport on the radio and have just listened to HMRC's tax return reminder advert:

MRC says that it wants to remind customers to stop ignoring the "little niggle" about completing their tax returns ahead of the January 31 deadline.

The adverts feature real ducks which were employed by HMRC to post for photos, before being returned to a bird sanctuary in Oxfordshire.

–– ADVERTISEMENT ––
Angela MacDonald, HMRC director general for customer services, said: "It's easy to put off doing your Self Assessment, but that tax 'niggle' means it's always on our customers' minds.


This campaign appears to be at odds with Judge Mosedale's comments about HMRC's lack of responsibility to alert their customers about filing deadlines. This is not a Judge Mosedale attack day, but there are some inconsistencies to consider here. If anyone hears any HMRC NRCGT tax return reminder adverts on Billabong radio or Desert FM please let me know.

etf
Posts: 447
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Thu Feb 01, 2018 1:53 pm

The Carrie Gracie affair has highlighted that those in charge of the BBC did not treat individuals equitably, with the resulting embarrassing grilling they encountered yesterday.

It must be hoped that those in charge of HMRC wake up and appreciate that taxpayers have been on the receiving end of similar inequitable treatment from HMRC.

From 6 April 2015 up until 31 December 2017, HMRC accepted 722 1st stage appeals against NRCGT return late filing penalties. In my opinion, those who have failed with their appeals will often have had an equally good case (not advised by their legal adviser/no knowledge of the 30 day NRCGT return filing requirement until they completed their self assessment tax return). For some individuals to be fined £700 and others in a similar situation to have their fines quashed is simply inequitable and HMRC will lose the trust of the public if they continue to act in this manner.

Other examples of HMRC's inequitable treatment include the lavish advertising campaign provided for self assessment taxpayers v a couple of tweets for NRCGT returns and a one year penalty holiday for MTD taxpayers v immediate £1,600 penalties for NRCGT returns.

I have copied below a link to an analysis of the NRCGT Tribunal cases and a potential get out of jail card solution for HMRC. Will they be brave enough to act now or will we have to drag those in charge of HMRC in front of Margaret Hodge's replacements to admit their inequitable treatment of taxpayers?

https://www.taxation.co.uk/Articles/2018/01/23/337516/penalties-non-res-capital-gains-tax-returns

etf
Posts: 447
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Thu Feb 01, 2018 2:56 pm

I've just printed off and read more carefully Andrew Hubbard's analysis in the artlcle referred to in my post above.

In his article Andrew states it is his understanding that HMRC is not conceding on any NRCGT appeals. If correct, and I suspect it is because Andrew is a very well known tax adviser, I do question why it takes HMRC ages to respond to an appeal if a stock response letter would do the job. Perhaps the delay is just for effect, to give an impression that someone in the department which is unwilling to speak to its customers, is actually reviewing the facts of the case.

Andrew's statement is also proof that HMRC is treating people with the same circumstances inequitably because their own records show there have been 722 successful appeals. This is just such a mess.

etf
Posts: 447
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Mon Feb 05, 2018 4:35 pm

I'm currently catching up on my NRCGT Judge Mosedale reading and have extracted the following from the 2nd page of the Hesketh case:

It is also HMRC’s case that HMRC operated a ‘light touch’ in that they did not
impose any late filing penalties on NRCGT returns filed on or before 7 May 2016.


Now if the above had stated the tax penalty amnesty operated for filings due for the tax year ended 5 April 2016, I could understand the logic i.e. no penalties for the 1st tax year to help the rules contained in this new filing obligation to become better known. This would be similar to the MTD penalty holiday that I referred to previously in this thread.

However, plucking a date such as 7 May 2016 at random, seems well, just very random, in fact so random, Rowntree may use it in their next advertising campaign.

You would also expect HMRC to publicise the penalty holiday to help raise awareness of the new filing regime. Presumably a 7 May 2016 cut-off was so random they decided to keep it under cover because everyone would have said 7 May, are fruit bats now running HMRC?

If we take for example, two twin sisters who live in Australia and Borneo respectively. They each sell their London flats completing on 6 April 2015. Neither files a NRCGT return within the 30 day window because they don't follow HMRC on twitter and neither subscribes to agent updates because they are not agents. Sister Australia completes her 2015/16 self assessment return on 6 April 2016, realises her NRCGT filing failure and files her NRCGT return on 7 May 2016. She does not receive a NRCGT penalty because she is covered by the amnesty. Sister Borneo completes her 2015/16 self assessment on 7 May 2016. She too realises her NRCGT filing failure and files her NRCGT return on 8 May 2016 i.e. one day later than her sister. She gets clobbered with a £1,600 penalty for being one day late over a deadline that was not publically known in the first place.

Time to go and eat some Rowntree randoms and read page 3. And then BINGO it hit me. 30 days from 6 April 2015 (1st day of this horrid regime) is 6 May 2015 and 12 months from that is 6 May 2016. Presumably, the 'light touch' approach was fine until it meant giving up 12 month late penalties totalling £1,600 a pop.

SteveP02
Posts: 1
Joined: Thu Feb 08, 2018 1:16 pm

Re: NRCGT return

Postby SteveP02 » Thu Feb 08, 2018 1:49 pm

My wife and I have just been hit with a £700 fine each for this and we would greatly appreciate advice on the best basis to appeal.

We left the UK in December 2015 and had our home of 15 years redecorated then put on the market. It took a while to sell, was never let, and completion was in Nov 2016. We never had a clue that the sale of our own home needed to be reported, and didn't receive any advice to do so at the time of the sale. I'm not in self-assessment but my wife is, and it was in preparing her return an advisor alerted us to the 30-day trap. We each completed the NRCGT form but I also called the HMRC self-assessment helpline and was reassured to be told by a CGT technical advisor that we had been incorrectly advised and in our situation we did not need to complete any paperwork.

Our fines arrived this morning. CGT owed = £0, fine for not being aware of the 30-day rule = £1400. I am incandescent over the unfairness of the implementation of this rule and the disproportionate size of the penalty.

Thanks

etf
Posts: 447
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Tue Feb 13, 2018 7:42 pm

Hi Steve,

Thank you for your post.

You are not alone in missing this filing requirement. 7,356 of the 20,264 NRCGT returns that were filed in the period 6 April 2015 to 31 December 2017 were late which suggests a whopping 36.3% of filings did not meet the 30 day deadline.

Until Judge Mosedale's recently decided tribunal cases (Welland and Hesketh) that both sided with HMRC, many commentators thought HMRC were at the point where they would have to cancel these penalties (HMRC had already confirmed the £900 daily penalties they had previously been charging were to be abandoned although Judge Mosedale suggests HMRC were less than truthful in providing an explanation of that decision).

It is clear from the Welland case that Judge Mosedale had to make her decision without access to the full facts. In the 'Other taxpayers have been let off' section on page 23 she admitted she did not know why taxpayers who made late tax returns and were not charged a penalty were let off. I am not legally trained but think it would have been helpful if she had asked HMRC this question. The following opening paragraph from the taxpayers charter page is the reason why.

We want to give you a service that is even-handed, accurate and based on mutual trust and respect. We also want to make it as easy as we can for you to get things right. (etf bubble thought...well why didn't you contact non-resident landlords?).

A google search for 'even-handed' detailed the following synonyms: fair, just, equitable, impartial, unbiased, unprejudiced, non-partisan, non-discriminatory, anti-discrimination.

HMRC have not followed their own statement because they let 722 people off their late filing penalties following an appeal in the above period. I suspect nearly all of these will have been due to ignorance of the filing requirement and there is evidence on this thread that this was accepted by HMRC as a reasonable excuse. If Judge Mosedale had undertaken sufficient background reading like Judge Thomas she would have known this to be correct.

It is therefore clear that HMRC will have great difficulty in pretending they have offered an even-handed service when dealing with NRCGT return late filing penalties. I suggest you draw this to the attention of your MP and to HMRC in your appeal.

I think it is illuminating that having followed Judge Mosedale's suggestion that taxpayers contact HMRC's helpline you arrived at the wrong result (and indeed having received advice from a CGT specialist mirroring my opening post on this thread). I suggest you detail this in your appeal and it is my understanding that HMRC record calls so evidence may be available at their end. This should not be seen as an attack at HMRC's staff, but instead on the politicians who dream up a tax system that is so complex.

It does appears the subject matter was too complex for HMRC's staff as they appear to have presented evidence supporting the taxpayer in the Hesketh case (this is very funny...a bit like Chelsea starting to play for West Ham half way through a match, but given the complexity of our tax system wholly understandable).

KR

etf

rbk123
Posts: 7
Joined: Tue May 30, 2017 1:27 am

Re: NRCGT return

Postby rbk123 » Thu Feb 15, 2018 1:38 am

I note in your reply to Steve that you say you are not legally trained. I would like to add some comments from a UK qualified lawyer, from HMRC and from me.
Firstly HMRCs response to a FOIA question ( seven months after first asking ) regarding penalties being cancelled where being ignorant of the process was the excuse. Quote -
“Your request falls within scope of information held by HMRC as we do have data on penalty cancellations in relation to late submission of Non Resident Capital Gains Tax (NRCGT) returns. Whilst we record when we cancel a penalty on grounds of reasonable excuse, we do not record the detail of those reasons.” Really? How does that sit with the auditors?
Judge Moseland said that Welland had not proven that penalties had been cancelled on those grounds although he had asked for the information. HMRC are refusing to release this information. According to my lawyer, the Judge has the power to insist they provide this information and should have adjourned the case until she had the information and thereby could make a more informed decision.
In the case, Welland vs HMRC, Judge Moseland makes some huge assumptions in favour of the respondent. On the point of notifying those affected, she states that Parliament cannot have intended to give HMRC such an onerous duty. Unless she has consulted with Parliament on this, she cannot know its intention, neither can she know how onerous the task might become unless she has an in depth understanding of the systems HMRC already had in place. It is entirely possible that if the task became onerous , it was HMRCs own doing by, in part, dismissing advice given to them in their consultations.
On the Tribunal cases so far. The judges seem to major on whether tax is due or not. It had already been decided by HMRC that no tax was due and the point of the appeals was to object to the penalties applied. It would appear that the judges cannot agree. Judge Moseland states that she does not agree with the findings in the McGreevy case. There could be problems in the judicial system.
So why does Judge Moseland disagree? Judge Moseland has looked at the case presented to her from a purely legal point of view. I don’t think anyone could successfully argue that HMRC were acting illegally. ( A more in depth study would be required , particularly as those fined £700 had no opportunity to act as HMRC did not notify them of the impending 6 and 12 month penalties because HMRC were completely unaware until their “customer” belatedly filled in the relevant form. Will HMRC use the excuse, “ We didn’t know because no one told us!” ) Underhand, devious, and incompetent, quite probably, but not illegal. What is worrying is that Judge Moseland completely ignores any morals or ethics in coming to her conclusions. When judges do that it is a sign that the fabric of society is going to come under pressure. Capital punishment wasn’t illegal, yet it was abolished.
HMRC –“There is no definition in law of ‘reasonable excuse’. Our Self Assessment Manual provides staff with some examples of what might constitute a reasonable excuse as well as some that would not be accepted.” Lawyer – “HMRC are trying to have their opinion of a reasonable excuse upheld by law. Their argument is no stronger than the opinion that not knowing due to not being informed is a reasonable excuse.”
From the outset HMRC have failed to find a satisfactory way to bring in this system. They had available a system which could be modified as they knew the identity of those this would affect.
They ignored expert advice given in their consultations, such as, the 30 day period to fill in a form won’t work.
I find it ironic that HMRC is using lawyers at tax payers’ expense to defend a ludicrous situation of their own making and hound thousands of people who owe no tax.
Next. Find out who had their penalties overturned and why. Is it a level playing field or are these companies or people with influence? Find out how this in being applied to non UK citizens. I suspect non UK citizen cases are not being followed up. This may explain some of the 700 plus with penalties removed. We know of one where a letter from HMRC informing a person of £100 fine has not been followed up in over a year.

BW

etf
Posts: 447
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Thu Feb 15, 2018 11:47 am

Thanks rbk123. You make a number of interesting points.

“Your request falls within scope of information held by HMRC as we do have data on penalty cancellations in relation to late submission of Non Resident Capital Gains Tax (NRCGT) returns. Whilst we record when we cancel a penalty on grounds of reasonable excuse, we do not record the detail of those reasons.” Really? How does that sit with the auditors?
Judge Moseland said that Welland had not proven that penalties had been cancelled on those grounds although he had asked for the information. HMRC are refusing to release this information. According to my lawyer, the Judge has the power to insist they provide this information and should have adjourned the case until she had the information and thereby could make a more informed decision.


I am particularly interested in the above point and hope this will be looked at by a judge in any following tribunal case.

I'm afraid I showed US Presidential tendencies in my quoting of statistics in my earlier post (sorry!) and so am detailing the figures long hand below to correct the record:

Period 6 April 2015 to 31 January 2017: 20,264 returns filed of which 7,356 were late.
5 months ended 30 June 2017: 6,897 returns filed of which 2,159 were late.
3 months ended 30 September 2017: 3,348 returns filed of which 1,102 were late.
3 months ended 30 December 2017: 3,896 returns filed of which 1,336 were late.

So in summary, in the period 6 April 2015 to 31 December 2017 34,405 returns were filed of which 11,953 were late (34.7%).

In the period 8 May 2016 (the day HMRC withdrew their unknown penalty amnesty) to 31 December 2017, 722 appeals were accepted at the 1st stage and a further 50 were accepted at the 2nd stage. I suspect HMRC started off with a lenient approach to appeals from 8 May 2016 (we have evidence on this thread that ignorance was accepted as a reasonable excuse), but at some stage someone in the NRCGT team made a decision to start playing hard ball, so we have ended up with a system that is not even-handed (thus breaking the taxpayers charter).

I hope others will throw their two pennyworth into the ring.

KR

etf

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