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Where Taxpayers and Advisers Meet

Late tax return + self employed earning below tax allowance

almondtree
Posts: 2
Joined: Mon Jun 06, 2016 11:29 pm

Late tax return + self employed earning below tax allowance

Postby almondtree » Mon Jun 06, 2016 11:55 pm

Recently I got late penalty letters from HMRC saying I have £1,716.15 overdue.
I understand I cannot avoid my late penalties. (If there is a way to appeal for penalties, do let me know :) )
I am writing to consult all of the experts here to see if I can reduce the part where the penalty is subjected to tax I actually need to pay.
If you're ready, please read on. :)

In mid-2013/2014 (I can't even remember now, I think it is 2014),
I've set up self assessment as I was planning to take some freelance work.
I did not take any freelance work and shortly after I've set it up I moved.
After I moved, I forgot to change my address and I didn't receive any HMRC letters.

From 2013-2014 I was in full time employment and the income tax was already taken from PAYE.

From sept 2014 - sept 2015 I was in full time postgraduate study.
I was in part time work sept-dec 2014, which I earned £1200.
(I didn't change my address as I was working in the same place since Jan 2014.)
I took one contractual work which I earned £180.
(I reported my new address and NI number to the HR)
To sum up I did not earn more than £11,000 (i.e. tax allowance) that year.

Recently in March 2016 I started full time employment and got my first payslip.
Soon after I got letters from HMRC saying I have £1,716.15 overdue.

When I checked online I see the below:
2013 to 2014 tax return Overdue
2014 to 2015 tax return Overdue
2015 to 2016 tax return due by 31 January 2017
Pay now to avoid further penalties.

I understand £1,716.15 because penalties charges are £100 + £300 (6 months late) + ££300 (12 months late)
From online research I can see there's an item which says "Up to £900 (90 days at £10 a day from 3 months late)"
However to my understand this amount is subjected to the amount of tax I owe.
So does that mean I can pay less?

My assumptions:
I did not earn over £11000 in 2014-2015 so I don't think I am subjected to income tax.
I was in full time employment already in 2013-2014 so I think I've paid my taxes.

Please do correct me if I am wrong in anyway! As you can see I am a tax/finance/bookkeeping newbie and I would love to have any suggestions/comments on this issue!
Thanks so much for reading and I hope to hear from you all soon. :mrgreen: :P

nikkisizer
Posts: 342
Joined: Fri Nov 04, 2011 5:26 pm
Contact:

Re: Late tax return + self employed earning below tax allowance

Postby nikkisizer » Tue Jun 07, 2016 8:15 am

Hello almondtree,

The penalties issued are late filing penalties for not filing your tax return on time.

Therefore, regardless of whether or not any actual tax is due the late filing penalties unfortunately still stand.

Happy to help if required so if you need any further assistance please do not hesitate to contact me.
Kind regards,

Nikki Sizer

Sizer & Co Accountants
nikki@sizeraccountants.com
[url]http://www.sizeraccountants.com[/url]

Birmingham - London - Manchester - Leeds

bd6759
Posts: 3109
Joined: Sat Feb 01, 2014 3:26 pm

Re: Late tax return + self employed earning below tax allowance

Postby bd6759 » Tue Jun 07, 2016 9:02 am

What you need to do is contact HMRC, explain what you have said above, and ask them (under s8A Taxes Management Act 1970) to withdraw the Notice to File. As long as they are satisfied that there is no overall liability they should agree.

If the notice is withdrawn, you do no need to complete a return and the penalties will be cancelled.

almondtree
Posts: 2
Joined: Mon Jun 06, 2016 11:29 pm

Re: Late tax return + self employed earning below tax allowance

Postby almondtree » Tue Jun 07, 2016 9:11 pm

What you need to do is contact HMRC, explain what you have said above, and ask them (under s8A Taxes Management Act 1970) to withdraw the Notice to File. As long as they are satisfied that there is no overall liability they should agree.

If the notice is withdrawn, you do no need to complete a return and the penalties will be cancelled.
Thanks for giving me a point of reference.

I am trying to look it up online and I landed on this - may I know if I am in the right section?
I can't see a section labeled as s8A in this document.
http://www.legislation.gov.uk/ukpga/197 ... /8/enacted

I would like to know during my call which points should I emphasis on and which ones not to bring up.
Would mentioning the fact that I forgot to change my address make my whole argument invalid?
Thanks so much for your help. :)

bd6759
Posts: 3109
Joined: Sat Feb 01, 2014 3:26 pm

Re: Late tax return + self employed earning below tax allowance

Postby bd6759 » Tue Jun 07, 2016 10:53 pm

My mistake. It is s8B TMA 1970.

On legislation.gov you get the law as it was enacted back in 1970. There have been countless amendments since then, and it should not be relied upon.

section 8B was inserted by Sch51 Finance Act 2013: Scroll down to para 3, where it says "After section 8A insert..."
http://www.legislation.gov.uk/ukpga/2013/29/schedule/51.

Note that you are now out of time to request that the 2014 return is withdrawn, but 8B(6)(b) gives HMRC discretion to extend the time limit.


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