Hello

Thank you in advance for any advice on my situation.

Between 2009 and 2013 I was registered as self employed,

in the earlier couple of years i was going through a stressful personal break up

was having problems with work because of depression,

also spending my money to go to court of access to my daughter.

At the time I was couch surfing and frankly forgot all about tax returns.

The HMRC fined me in total £4,524 over this period which I can't afford to pay.

I find these charges extortionate, is this even legal for a start?

All i did was not send in a piece of paper and now i am in this huge amount of debt?

The last thing on my mind at that time of my life was filing a tax return especially when i had literally done no work or earned anything at the time

- I certainly couldnt afford an accountant.

Since then i started a limited company in 2012 which is still operating now and all tax returns are up to date for myself and my company, done via an accountant.

All the old self employment returns have also been done and the self employment terminated as i am employed on PAYE by my own company.

The HMRC have passed the debt to CCS collect.

I wrote to the HMRC to try and appeal these extortionate charges based on what I have said above,

but rather than responding to my appeal they just ignored it and wrote back to me with the figure I requested in the same letter.

CCS already seem unreasonable in their initial letters,

stating they want an "acceptable payment offer"

- in my opinion acceptable is what I can afford,

if this is £1 every week then that's what they should get.

Am i correct in thinking that I should respond to CCS in writing rather than on the phone so i have written records of everything?

And is it also right that they have to accept what I offer them on a monthly basis?

I am thinking of £50 per month, which having a family of five to support is more than reasonable.

I am writing back to HMRC today to request they actually respond to my letter properly rather than being totally ignorant.

Finally, how on earth can a company, the HMRC, just make up these charges?

They are just a company after all aren't they,

and it's a ridiculous amount just because they didn't receive a piece of paper!

Thanks

HMRC aren't a company. They have powers under varying pieces of legislation including the Taxes Management Acts.

Don't go in all guns blazing, telling them "it is a ridiculous amount", or that the figures are "extortionate". They probably can enforce this, and your aim should be to get them to exercise any discretion they have to reduce what is owed.

"First things first" : how much is "tax owed" (with the interest on it)?, and how much is "late filing penalty/penalties" (with the interest on it)?.

For the tax:

They probably have issued 'determinations' for the relevant years, and if these aren't appealed within the relevant period, they become "fixed" and owed.

It doesn't matter if you would have owed less had you filed a return .... because you didn't file a return, and they sent a determination.

I last had direct involvement with a similar situation some 9 years ago, and helped a friend file the 'missing returns' they hadn't sent back.

We were able to get HMRC to reconsider the determinations, and he ended up only having to pay the penalty charges, as they accepted the return, and the fact that had he filed those returns he wouldn't have owed any tax.

I've found this, from 2011, which sets out how 'special relief' from determinations, where you are outside the time limits for appeal, can be applied for.

https://www.taxation.co.uk/Articles/2011/06/15/25592/determined-deadlines

An example of a success from Sept 2015 is at: https://www.accountingweb.co.uk/tax/hmrc-policy/taxpayer-wins-appeal-for-special-relief-on-tax-bill

For the penalties:

Filing a return if they issue you one isn't optional. You might think "The last thing on my mind at that time of my life was filing a tax return", but HMRC are unlikely to agree this exempts you (or gets you off the late filing penalty)......

Post back with the split between "tax owed and its interest" and "late filing penalties and its interest", and I may be able to offer further advice.

HMRC are not a company, they are servants of the crown and have far reaching powers and that includes charging you for not submitting your paperwork in time even if you owed nothing or they owed you money Owe them VAT and they can arrest you.

TBH filling in a self assessment tax return doesnt take an age if your affairs are simple and even if you got it wrong at least it would have extended the deadline as they chased up the missing info.

They also add 8% statutory interest so you need to see if this clock is still ticking as it doubles the debt every 8 years.

CCS just collect the money so no point talking to them on the phone.

By all means work out what you can realistically pay each month and make sure that it is greater then the interest still being levied if it is.

Force them to make a statement as to what they think is reasonable or acceptable and then take it from there.

Thanks for the responses!

I am sure i have seen HMRC registered as a company on companies house, could be wrong, haven't checked again.

I don't owe any tax for the period as there was actually no work carried out under the self employment, i actually was employed by another company from 2008 - 2010. I was stupid to think the HMRC would realise this and would actually realise i wasn't self employed anymore...obviously i was wrong there.

The reports were actually filed in 2015 i think after i had the letters reach me and sent them to my accountant, so no more charges are being applied.

I have spoke to HMRC today and they advise that i write to a specific department with the address they gave me, along with information regarding my mental state at the time and the fact i have been on and off anti depressants for years. I just buried my head in the sand with this one as i was dealing with a very rough time in my life.

I doubt they will accept my appeal, but they also said to write to the debt company and tell them i am in dispute with hmrc so i will not be dealing with them in the mean time. They recon they will likely pass the collection back to the HMRC due to not being able to chase me during a dispute.

Since i was constantly moving address around 2010 i didn't receive any paperwork from the HMRC for quite a long time until i had managed to get back on my feet and my current business up and running. I had no fixed address, no money to pay an accountant and i have no idea how to do tax returns myself.

It's a real messy situation, because from my perspective i have valid reasons to have not submitted the paper work, and i actually did resolve the issue as quickly as i could when i eventually did settle down and received the paper work when the HMRC caught up with me.

Since 2012 all tax returns and payments have been made on time, i am hoping this will make them realise i didn't do this on purpose.

Also sorry, it's not even about how long a return would take to do, i'm no accountant and i couldn't afford to pay one at the time.

At the time my main focus was getting a place to live after leaving a family home and paying the court for contact with my daughter.

So you can imagine my mental and emotional state wasn't concerned with a piece of paper, i was concerned with my daughter.

Not to mention my head was completely screwed after a "relationship" with a narcissist.

I forgot all about it, i didn't get any letters as i had no fixed address etc....

i know it might sound like it's not an excuse, but to me it was, mental health is a killer!

It is "self assessment". If your tax affairs were simple, you wouldn't need an accountant...

I didn't realise that, my way of thinking was based on trying to submit a corporation tax return a few years earlier and it was asking for information that i hadn't a clue about. Obviously the self assessment is different so i admit I should have looked into it rather than assuming.

I think the worst thing about this is that i feel i am now thousands of pounds in debt when i haven't gone out of my way to get debt, no loan, no credit card, nothing that i should be in debt for...but so it is that debt is made out of thin air. I could have handled a few hundred , but this is extortion - isn't it?

Answer what I've asked, and I'll give you my opinion......

i will have to ask my accountant tomorrow as all i have is one big figure.

Well, if you have an accountant who has the figures : surely they can tell you if HMRC are being reasonable or extortionate!

Additionally, the details should be visible in your self-assesment account online.

I don't think legally they are being extortionate, i am actually referring to how i feel about the amount of money it is, it feels like extortion to me as it's not something i have done to be malicious.

If HMRC felt you were being malicious / fraudulent, they can re-examine the last 20 years of your tax history..........

http://www.rossmartin.co.uk/tax-guides/347-time-limits-for-assessment-and-claims

The penalty for failing to return Self Assesment forms depends on if the forms were returned or not, not if the failure to return was malicious or not.

It may be worth noting:

http://www.rossmartin.co.uk/penalties-a-compliance/penalties-appeals/604-reasonable-excuse

Cases where taxpayer conduct is not a reasonable excuse may include those where he:

 

• Suffers from a long-term illness or condition and so was aware that he had on-going difficulties and so could have made alternative arrangements, but did not.
  

I get your point, you're right, the size of the charges still feel extortionate, especially when large companies get away with tax evasion all the time.

might pay you to pop off to the HMRC website and fill in the Free subject Access Request form there.

get everything they hold on you.

also, totally ignore CCS collect

don't even bother replying/writing/speaking to them.

they are a DCA

a DCA has absolutely no legal powers whatsoever in this gov't debt

they ARE NOT BAILIFFS

dx

I get your point, you're right, the size of the charges still feel extortionate, especially when large companies get away with tax evasion all the time.

"Evasion" eh?

You can, of course, provide evidence of this...

"Evasion" eh?

 

You can, of course, provide evidence of this...

The OP could mean tax avoidance, disgruntled.

HB

Absolutely : except they avoid tax by using the regulations / HMRC's published interpretations (& getting their returns in on time!).

This being completely legal, and the responsibility for reducing legitimate avoidance falls to the law makers creating a clear and transparent tax scheme that avoids creating "loopholes".

might pay you to pop off to the HMRC website and fill in the Free subject Access Request form there.

get everything they hold on you.

 

also, totally ignore CCS collect

don't even bother replying/writing/speaking to them.

 

they are a DCA

a DCA has absolutely no legal powers whatsoever in this gov't debt

they ARE NOT BAILIFFS

 

dx

I will ignore CCS on advice, but what if the HMRC refuse to make any arrangement because it's been passed to them? I fully understand that i don't have to deal with CCS at all as I have no obligation to them.

I am starting to think that appealing this is just pointless, they won't care about my personal circumstances, just like number of people on here don't see it from my personal point of view; at the end of the day life circumstances and mental situations do in fact cause people to avoid and forget things.

So i am looking for a suggestion, should i write to HMRC and just make an offer of monthly payments that I can afford to stick to?

To others: I didn't come here to argue or be ridiculed, I came here for some help and to vent my frustrations, but a simple google search will show you quite a few bits of information on large corporations avoiding tax, whether it be legal or not it's not right that the little guy is always **** on. I really don't see what the relevance is on the word i used, evade and avoid mean pretty much the same thing in english so you know what i am talking about, i don't speak in legal jargon, you're just being pedantic.

I am starting to think that appealing this is just pointless, they won't care about my personal circumstances, just like number of people on here don't see it from my personal point of view; at the end of the day life circumstances and mental situations do in fact cause people to avoid and forget things.

They do indeed. It is just hard to claim "I forgot" for 4 years, when after the first year they'd be sending penalty notices.

Avoiding the issue? sure (and that's what my friend did .........), but then they had to accept the penalties that came with doing so.

To others: I didn't come here to argue or be ridiculed, I came here for some help and to vent my frustrations, but a simple google search will show you quite a few bits of information on large corporations avoiding tax, whether it be legal or not it's not right that the little guy is always **** on. I really don't see what the relevance is on the word i used, evade and avoid mean pretty much the same thing in english so you know what i am talking about, i don't speak in legal jargon, you're just being pedantic.

Tax evasion is illegal. Tax avoidance is entirely legal. The difference (one should be prosecuted, the other not) is neither sophistry nor pedantry.

I hope the " I didn't come here to be ridiculed" wasn't aimed at me. I don't see where I've ridiculed you, although I clearly haven't told you what you'd hoped to hear.

None the less, I maintain I've told you what you need to hear, which is the approach HMRC are likely to take, and the best way to adapt to that.....

No no, i wasn't referring to you, someone was being pedantic regarding the wording i used since i am not actually speaking in legal terms, i am speaking in normal english.

i assume i am actually now just going to have to suck it up, I made a huge error years ago, i personally see it that my life was in tatters and my only concern then was sorting my life out for mine and my kids sake, but legally i have no leg to stand on.

Si am going to write to HMRC today and still explain the situation as an appeal, I imagine they will decline it, so after that i will proceed to make instalment arrangements with them that i can afford. After all, they can't take something i don't have and are not legally allowed to leave me in hardship, i imagine especially since i have kids. I will ignore CCS completely - even though i was advised to write to them by HMRC and tell them it's in dispute, but then others on here say ignore them, which I believe is better as to not give them ammunition or to prove who i am.

And more advice on doing this would be welcomed, and i really appreciate you trying to help me. In a previous letter from hmrc they said that CCS are dealing with it now, but other people are saying to deal with HMRC and not CCS, i'm not sure what to do in this situation, do you think i should wait until CCS pass it back to HMRC?

 

i assume i am actually now just going to have to suck it up, I made a huge error years ago, i personally see it that my life was in tatters and my only concern then was sorting my life out for mine and my kids sake, but legally i have no leg to stand on.

Not quite ..... remember that distinction between 'determinations' (where you can apply for 'special relief') and penalties.....

i am going to write to HMRC today and still explain the situation as an appeal,

Sort out what bit(s) you are appealing, and your most valid ground(s) for appeal, first??

I imagine they will decline it, so after that i will proceed to make instalment arrangements with them that i can afford. After all, they can't take something i don't have and are not legally allowed to leave me in hardship, i imagine especially since i have kids. I will ignore CCS completely - even though i was advised to write to them by HMRC and tell them it's in dispute, but then others on here say ignore them, which I believe is better as to not give them ammunition or to prove who i am.

 

And more advice on doing this would be welcomed, and i really appreciate you trying to help me. In a previous letter from hmrc they said that CCS are dealing with it now, but other people are saying to deal with HMRC and not CCS, i'm not sure what to do in this situation, do you think i should wait until CCS pass it back to HMRC?

 

also, totally ignore CCS collect

don't even bother replying/writing/speaking to them.

 

I'd certainly not speak to CCS.

Since CCS have already written to you, write back ONCE, noting that the matter is in dispute with HMRC and you'll be payingthem ( CCS) nothing while it is in dispute, and once the dispute is resolved, if you owe HMRC anything you'll pay HMRC direct, so you have no further need to discuss anything with CCS nor pay them anything.

These debt companies like to keep pushing though don't they.

I remember you saying this yes, but i'm not really sure i understand what you mean. All of the bill i have is pretty much penalties, i do think there is a small amount of tax their, my accountant has that figure so ill ask.

The tax (determination) you might aim for 'special relief'.

The penalties I suspect you'll have less chance of success, but can still try an appeal.

These debt companies like to keep pushing though don't they.

What they like and if they can make you engage with them are 2 different things though. Send them the letter explaining why you aren't engaging with them, and then ignore anything from them (except a statutory demand or court claim form, but they won't likely do those).

What is a special relief?

I know, i am becoming annoying

Why would they relieve me from paying tax?

Surely they are more likely to waver the penalties than the tax?

What is a special relief?

I last had direct involvement with a similar situation some 9 years ago, and helped a friend file the 'missing returns' they hadn't sent back.

 

We were able to get HMRC to reconsider the determinations, and he ended up only having to pay the penalty charges, as they accepted the return, and the fact that had he filed those returns he wouldn't have owed any tax.

 

I've found this, from 2011, which sets out how 'special relief' from determinations, where you are outside the time limits for appeal, can be applied for.

https://www.taxation.co.uk/Articles/2011/06/15/25592/determined-deadlines

An example of a success from Sept 2015 is at: https://www.accountingweb.co.uk/tax/hmrc-policy/taxpayer-wins-appeal-for-special-relief-on-tax-bill

I know, i am becoming annoying Why would they relieve me from paying tax? Surely they are more likely to waver the penalties than the tax?

Why do you think they are more likely to waiver penalties than a determination?.

One of the requirements for special relief is that the tax payer brings their tax affairs up to date, and there are rules for 'special relief' (see the links provided).

They are more likely to waiver penalties when the tax payer gives sufficient reason at appeal, but nothing you've said so far fills me with confidence that your situation fits in with HMRC's published guidance on 'sufficient reason'.

I will have a look at the links what you sent this evening, because i don't know what you mean by "determination" in this case, or special relief.

Yeh "sufficient reason" - in other words, unless you're pretty much dead, no mental illness or anything counts, even though mental stress is a massive problem.