NRCGT return

[etf]

Regular readers will recall I take issue with Sir Jim spouting nonsense about the Taxpayers Charter sitting at the heart of what HMRC do.

I'm even more agitated by the latest reincarnation of HMRC's Freedom of Information Office seemingly take a decision that information which is damaging to HMRC should be hidden at all costs. This first manifested itself with HMRC advising me that quarterly statistics regarding NRCGT penalties would no longer be made available. Understandable if you are seeking to show the public taxpayers are being treated fairly when in one quarter only 3% of appeals against late filing penalties were accepted and in another (mind the gap) 99% were accepted.

On another request HMRC refused to release the total of NRCGT late filing penalties they had levied. It became even more absurd when the statistics that had been denied were published by somebody else i.e. the excuse HMRC had provided to me for not releasing the statistics was clearly untrue. Respected punter Lambs appeared to agree.

Now if I was in a football crowd they would be chanting...'it's happening again, it's happening again, the FOI office are a mendacious outfit of devious men' (possibly not a football crowd with the 'm' word which I've stolen from probably a Surrey based Harlequin supporter who added it to my vocabulary recently).

My latest encounter with the FOI people asked them to confirm the number of 2022/23 self-assessment tax returns filed by 31 January 2024 that HMRC had not processed by 30 April 2024. The correspondence flowed as follows (seemingly unlike 2022/23 tax return processing at HMRC):

“How many 2022/23 self assessment tax returns filed by 31 January 2024 had not been
processed by HMRC at 30 April 2024.

The returns that are showing as received and yet to be processed have failed the on-line
processing procedure, we are unable to ascertain if the returns are valid returns without
looking at them individually. This would exceed the cost limit.


“Please just supply the number of unprocessed returns not processed in the reference
period. I'm not concerned about the valid bit”


Apologies that our previous response implied that we would be able to provide information if
we included invalid returns. We have not been able to identify a suitable report or data set
that would be able to provide this figure.


How convenient!

[etf]

I googled to see whether anyone had published the amount of NRCGT penalties levied by HMRC and came across the following which suggests the application of the rules is as confused as it ever was:


By AdShawBPR
06th Dec 2023 09:40
I recently took on a client who didn't realise a CGT was due on the sale of a property. Solicitors never told her and when pressed they referred to their terms and conditions saying they don't give tax advice! She did receive a £100 penalty for a late CGT return but this was waived on appeal. From others I have seen, solicitors are not telling their clients about this.


Replying to AdShawBPR:

By Software Seeker
06th Dec 2023 12:34
What was the basis of the appeal, out of interest?


Replying to Software Seeker:

By AdShawBPR
06th Dec 2023 13:56
I just told HMRC how it all happened which is: The taxpayer (not a wealthy individual at all) has been filing her own straight forward tax returns without fail and on time for many years and she knew she would have to report a gain on the return. She wasn't a client of mine but I know her and she asked me about the CGT entries on her return. I pointed out that she should have completed a CGT Return which came as a complete surprise to her. We did that together very quickly after I pointed out the error. I relayed all that to HMRC and the fact that the solicitor had said absolutely nothing about this. I also told them it was a daft system!


Replying to AdShawBPR:

By Software Seeker
06th Dec 2023 14:19
Thanks. So it looks like (although obviously I could be completely wrong), as an unrepresented taxpayer, HMRC took the appeal to mean that there was ignorance of the law and allowed the appeal on that basis. Didn't think that was an acceptable excuse, but (like I say) I could be completely wrong as to why the appeal was accepted.


Replying to Software Seeker:

By AdShawBPR
06th Dec 2023 15:39
I agree it does go against the ignorance being no excuse thing but on the other hand there is no law that says a taxpayer must be represented by a professional so while they do then take it upon themselves to know the rules on tax, this is so arbitrary and it has nothing to do with the actual tax calcs themselves. By agreeing to cancel the penalty HMRC would seem to agree that it is reasonable for a taxpayer to have missed this. The flip side is perhaps HMRC are really agreeing it's an unreasonable process!

Should HMRC be going back and refunding all the penalties levied in identical circumstances?

[etf]

Is this HMRC providing a map of the tunnel out of the Great Escape Camp?
Is this escape route available to everyone?


By birdman
11th Sep 2024 09:27
We recently took on a case where taxpayer had sold their former main residence (now renting); they let it before selling, and there was a small CGT liability, which hadn't been disclosed on their Return (prepared by the taxpayer) so HMRC sent a letter suggesting they might like to amend the Return, having picked up this omission.
In the HMRC letter it stated "It is now too late to submit a CGT on UK Property Return" - so we have no intention of doing so, as it would only attract a fine! Reckon we're covered.

[etf]

Errrh...seemingly not......cluster of all clusters. In the lyrics of the 1980s hit for Orange juice....'Rip it up and start again'.


By tractorboy
13th Sep 2024 16:44
I appealed against a penalty for a client on almost identical grounds (we were not acting at the time he sold the property I must add).

HMRC rejected the appeal and I quote the relevant part of their letter below:

"You did not send your Capital Gains Tax property disposal return. Your agent told us that this is because you were not informed by your solicitors of the requirement to complete a Capital Gains tax Return and make payment for any tax due within 60 days of property sale completion.

We've looked at your appeal against the late filing penalty and the 6 month late filing penalty for sending your Capital Gains Tax return in late for the tax year ended 5 April 2023.

We do not agree that you have a reasonable excuse. This is because when you sell your property, it is reasonable to research what is expected of you regarding your tax obligations.

UK properties sold after 6 April 2020 have ben required to complete separate Capital Gains Tax returns, all the relevant information has been clearly publicized on Gov.uk website and links to new guidance that has been included in the notes that accompany the self assessment tax return.

It states the process, timelines and what penalties will be charged if the return is submitted late. It remains your statutory duty to make yourself familiar with the requirements and comply with the regulations."

This was the outcome I expected and in all honesty the appeal was a bit in hope rather then expectation.

[etf]

Interesting comment below from somebody (now retired) who presided over some of the NRCGT late filing penalty cases. Will Sir Harra call for the long overdue review of these penalty situations before he retires? It is improbable that Taxpayers were treated fairly.....3% successful in one quarter and 99% in another quarter....there should have been a MIND the GAP warning. After all the Taxpayers Charter is at the centre of what HMRC do... mmmmm. RT references comments from an Accountingweb thread.


By richard thomas
14th Sep 2024 12:04
I was reading though the comments on this post with sadness and some incredulity that people who are supposed to know about tax could advise a client that in this situation they had little or no chance of a successful appeal. I was just about to get out my own trumpet to blow when I saw mul's post mentioning McGreevy.

Those who think ignorance of the law is no excuse need to read Perrin. The real point about conveyancing solicitors (and I agree with all the adverse comments: do the same solicitors not tell their purchasing clients about SDLT?) is that if by some fluke they tell the client about the 60-day rule, the defence of ignorance vanishes, but if they don't then it doesn't (and I've so held where relevant).

And in my view all daily penalties for NRCGT failures are invalid in the light of Donaldson.

And there is no law that says you can't file a 60-day return (as distinct from an amendment to it) after a s 8 return has been delivered, though HMRC's software may not cater for it. And assuming it's not a year late, filing it will stop penalties running.

FactChecker's response has obviated to a degree the need for me to eviscerate HMRC's response that is quoted.