NRCGT return

[rbk123]

We contacted HMRC in March 2014 with regard to NRCGT. We were advised the requirement would be to include sales details in our Self Assessment. We have always filed on time and paid our dues as well as responding in a timely manner to HMRC questions. We have URL numbers as we are registered as non-resident with regard to our rental properties. In the tax year 2015/16 we sold 3 properties and, when our accountant was preparing our SA returns, he came across the NRCGT requirements. We filed asap, no CGT was payable and we then were hit with £3960 in fines which we are fighting through the appeals process. These fines have been reduced to £1600 as "due to representations from agents and customers, the daily penalty has been removed." We have had our final appeal rejected, cannot appeal to the so-called independent HM Courts & Tribunal Service because they cannot overturn a fixed penalty. We are incensed we have been hit with fines as we believe we took the initiative to find out by contacting HMRC to ask about NRCGT. We have asked freedom of information questions and we're told as of 31 Jan 2017.
1. 20,264 NRCGT returns have been filed
2. 1583 show tax due of £7,688,004
3. 7356 were late : our comment that is 36%!!
4. Late filing penalty issued for 4,022 resulting in penalties of £3,338,910. Our comment : that is 30% of the revenue from NRCGT is penalties! We are asking what about the 45% who were late and didn't receive penalties.
Surely this is a clear indication that HMRC failed to inform those who were affected by the tax and reporting mechanism; HMRC send out reminders for self-assessment returns (we've just received ours). Why couldn't they do that to non residents regarding NRCGT.
We want our penalties removed but there doesn't seem to be any other avenue open to us.
Anyone interested in a class action against HMRC?

[etf]

Hi rbk123,

Thank you for your post which contains some interesting data that I have forwarded onto my professional body. I also requested this information from HMRC, but nearly 3 months later am still awaiting their reply.

Your thoughts on the in-equality of this penalty regime match my own. The up-coming MTD regime has a one year penalty amnesty to emphasise how uneven our current tax system is.

You will note from my posts that a number of individuals have had all penalties cancelled with circumstances seemingly not a lot different to your own.

If you have not already done so, I'd suggest writing to your MP and perhaps to "not so gorgeous" George at the London Evening Standard who devised this flawed system and handed out gongs to those in charge of HMRC for delivering a failing service.

KR

etf

[rbk123]

Hi etf

Thank you for your comments. We contacted our MP on the advice of our accountant after our first appeal was turned down. Our MP wrote to the Ceo Jon Thompson on our behalf and submitted the questions regarding NRCGT penalties. We continue to pursue this matter and have further correspondence citing the cases we have found through this and other forums. Staff at HMRC continue to tell us they are unable to exercise discretion over penalties but two similar cases we have come across together with the 4,022 late filers who were not penalised show this isn't true. We have asked HMRC to explain who these people are and await a response. We have an LLB lawyer advising us here in New Zealand who deals with tax fraud cases and he is amazed at the attitude of HMRC and the loopholes that a coach and horses can be driven through regarding their spurious arguments.

[etf]

For the benefit of others, I have copied below the following received from HMRC:

"I can confirm HMRC will no longer be issuing daily penalties for late NRCGT returns and all daily penalties raised for NRCGT are being withdrawn".

This was attributed to representations from a number of customers and agents. The reply was received just under 3 months after my correspondence was sent.

[fm189]

Thanks etf and others for this thread. Agree with everything said so far.

I have been fuming at the absurdity of the new rules, which feels like a sledge hammer to crack a nut. The normal logic of no tax = no penalty seems to have bypassed this one, or even the one about HMRC not applying a penalty until they have sent reminders / warnings out!

I had gone through all the HMRC telephone fiasco like yourself and have submitted 3 appeals for 3 different clients. The earliest one sent in February has now been replied to today, with the same wording in red mentioned by yourself. They have a 3 month plus backlog they said. Which begs the question why HMRC can take 3 months to process and yet clients in distant lands have 30 days to submit a convoluted return (not in plain English) and even if they do not have to send in computations should have gone through the various calculations to be able to complete the NRCGT.

Do you really think that the local MP can do anything? I am all up for a Tribunal fight but my client is not willing to pay for it! Luck of the draw is what is unfair as they have not applied penalties consistently even if it is the most unfair penalty regime HMRC have come out with. I am not hopeful that the other 2 appeals I sent out will be accepted (incidentally - very similar wording to what you copied from another post).

Surely HMRC should have contacted agents involved in the actual sale (estate agents and solicitors) about the regime. The ones I have spoken to are clueless and nothing received from their professional bodies either. HMRC seem more interested in the penalty generated rather than the actual CGT bill!!!

[etf]

When I heard George Osborne this morning referring to terrible policy, I had hoped he was talking about the NRCGT return filing requirements that he introduced. Sadly, he was talking about the Tory Manifesto document, although pot and kettle did spring to mind and that indeed was without any mention of a Cornish pasty.

HMRC has at least recognised that previously law abiding taxpayers were unaware of the filing obligation and agreed to cancel all daily penalties that have been charged in respect of late NRCGT return filings (usually £900). Available figures show that 36% of all taxpayers who have filed a NRCGT return did so late. The actual percentage of taxpayers who did not file an NRCGT return on time must surely be even higher because an unquantifiable number may still not yet appreciate they should have filed this return (or incorrectly decided not to do so, given the £1,600 penalties HMRC were charging once a return was filed late).

The news of the cancellation of the daily penalties was broken by a taxpayer who followed advice on a forum to write and complain to his MP. I would therefore urge all affected taxpayers to write to their MPs particularly as another election may follow later this year.

Many taxpayers who have filed an NRCGT return late will still face fixed penalties of £700. Whilst some taxpayers have managed to have these cancelled (for reasons HMRC are unwilling to discuss, even though seemingly identical cases have had penalty appeals refused), those who are unsuccessful will need to show they had a reasonable excuse for filing late to have the remaining penalties quashed. If an individual's lawyer (professionally trained in dealing with property disposals) has not heard of the return/flagged the filing requirement, the individual may have a reasonable excuse because they were relying on a professional to tell them what they needed to do. Indeed, is it reasonable for HMRC to expect taxpayers to read their website on a daily basis to glean knowledge that their own capital gains tax technical staff openly admit is outside their own knowledge? It will be interesting to see how this situation develops.

KR

etf

[Lambs]

There is an article on this now.

http://www.taxationweb.co.uk/tax-articl ... -bare.html

Regards,

Lambs

[etf]

Lambs-thanks for the article which I had not seen. I have sent a link to HMRC, my MP and will post it on the other main NRCGT penalty forum.

Apologies to Lee, I tried to give him 5 stars but the vote stopped after I had inserted the first star. I cannot amend it for 24 hours but hopefully others will give the article a high ranking if they agree.

KR

etf

[Lambs]

Thanks. I am pretty sure Lee is used to low scores on his articles by now. Or he should be...

[etf]

This is copied from another thread and may be useful for others considering an appeal to tribunal. If anyone else has already appealed, any feedback regarding your experience that you can post here will certainly interest others in a similar situation.


I have lodged my appeal to the Tribunal. I haven't seen any tribunal cases relating to this topic so I may be the first.

Leaflet T242 is very useful but it is clearly written assuming the appellant is resident in the UK! In fact, the tribunal system assumes one is resident in the UK or has a resident professional adviser. Section 8 states that costs are not normally awarded. If I pay for a representative and win then I lose the money. The fine is 700 pounds. Why would I have ever employed a tax professional when at no time did I ever owe any taxes? I will continue representing myself.

Hopefully, it will be a paper review. Even so, HMRC have 42 days to respond to me and then I have 30 days to counter. The letters from HMRC take 20-25 days from the date on the letter to the letter reaching my home. It is virtually impossible to meet that deadline unless I can send it back electronically.

If is is a hearing, we will have to fly to Birmingham and stay in a hotel. (Again, no costs likely to be awarded). I am only promised 14 days notice, though they will 'try' for 30 days, on a letter that takes 20-25 days so my chances of making it are slim. Assuming I make it, what if the appeal runs late? My wife has to appeal separately and what if we are not on the same day? If we win this time, we will really lose lots of money.

If HMRC win, the British tax payer will have lost more money than the fines (even with the paper process). Don't forget that there was never, ever, any tax due on the sale of our former home.

Why are myself and my wife treated as separate cases, on the same transaction, with virtually identical evidence? This double the costs for everyone.

I am still going to do my best to follow this through.