This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Penalty Appeal Query

tobapuw
Posts:1
Joined:Fri Feb 24, 2017 4:18 pm
Penalty Appeal Query

Postby tobapuw » Fri Feb 24, 2017 4:21 pm

Hi,

I have such an issue:

Back in November 2016 I received a letter from HMRC saying that I owe them £1,600 of unpaid income tax for the tax year 2013-2014. As the letter had a self-assessment heading on it I assumed it was sent to me by mistake because I was never self-employed in my whole life. When I have contacted HMRC I was told that I am liable for those charges, as I never responded to the original letter sent to me in February 2015 asking me to settle the balance of £130.

My next step was to appeal on the grounds that I have never received any correspondence from HMRC before November 2016 at my current address and perhaps the letter has been sent to my old address. Additionally, I mentioned the lack of sufficient knowledge of the UK tax system, and hence I could not take appropriate actions at a time. I thought that income tax is collected via PAYE system meaning that no action is required on my end. I concluded by saying I will be happy to pay the balance of £130 by I object additional penalties totalling £1,600.

My appeal has been declined because of the reasons below:

• I had to notify HMRC of the change of address
• I had to submit a tax return online even though I was not self-employed because I did not respond in the timeframe provided and the only way how HMRC could collect money from me is via self-assessment tax collection system
• I did not submit my tax return online

After this decision, my first step was to do some digging in order to find additional supportive documentation to back up my case. After this I filled my tax return at the end of December. The summary of documents I was able to find:

• Original letter sent to me by HMRC
• P60 for tax year 2013-2014
• Bank statement for the designated period

By finding HMRC’s letter I proved myself wrong that I did not get it. However, that letter was clearly saying that I owe £130 of unpaid income tax but it will be collected via PAYE system automatically. Therefore, as per my understanding I had all the rights to ignore it. That is why, perhaps, I put it aside without worrying too much. Additionally, the letter does not say that I had to submit my tax return online, therefore I did not action after getting it.

The letter also provided the breakdown of annual income earned and the amount of tax payable. After comparing the numbers stated by HMRC to my P60 and the annual bank statement I realised I did not have to pay the initial £130. My earnings did not exceed the personal allowance threshold for that tax year. The only reason why HMRC thought I had to pay the balance of £130 because they added £2,500 of Job Seekers Allowance on top of my annual wage received through the standard means of employment. I checked all money coming in and going out for the whole tax year and the only amount I was able to find was around £10, which I got from the government.

After I phoned HMRC again in January to say I was not liable for any tax in the first place and also I did not know that I had to submit a tax return online before sending the first appeal. The answer was the same: charges are for not coming back to HMRC and ultimately for not submitting the tax return in the timely manner.
What can be done at the current stage? What would be the next step?

section 44
Posts:4467
Joined:Thu Oct 30, 2008 12:47 pm

Re: Penalty Appeal Query

Postby section 44 » Tue Mar 28, 2017 1:12 pm

The only reason why HMRC thought I had to pay the balance of £130 because they added £2,500 of Job Seekers Allowance on top of my annual wage received through the standard means of employment.
Implies that you think that JSA isn't taxable income

SteLacca
Posts:448
Joined:Fri Aug 07, 2015 2:17 pm

Re: Penalty Appeal Query

Postby SteLacca » Tue Mar 28, 2017 3:37 pm

You can make representation to HMRC to have the requirement to file the Return withdrawn under S8B TMA 1970 on the grounds that the only income that you had was income subject to PAYE deductions (and yes, JSA is technically subject to PAYE deductions but falls below the threshold).

Now, S8B objections are notoriously difficult to get past HMRC, but it's worth a shot. UNLESS, you have already filed the Return, in which case you're a bit unlucky.


Return to “Income Tax”