HMRC issues

[HP Mum]

HI

 

I just got 2 letters from the Inland Revenue:

 

1) Said I had filed late and needed to pay almost £1000 in penalty fines.

 

2) Said my return for 10-11 showed I had 0 tax to pay.

 

The penalty letter was dated 2 days before the letter which stated I had no tax to pay.

 

Do I still have to pay the penalty ? Or were they assuming I would owe tax and were being penalised for not paying it ?

Surely it seems really unfair to have to pay the penalty on 0 tax?

 

(Yes I know I was months late and that was wrong but I never seemed to find enough hours to sit and finish it. Was eventually 4 months late...)

 

Does anyone have an idea on this ?

[BazzaS]

...

Edited July 9, 2012 by BazzaS
duplicate / duff post, deleted.

[BazzaS]

HI

 

I just got 2 letters from the Inland Revenue:

 

1) Said I had filed late and needed to pay almost £1000 in penalty fines.

 

2) Said my return for 10-11 showed I had 0 tax to pay.

 

The penalty letter was dated 2 days before the letter which stated I had no tax to pay.

 

Do I still have to pay the penalty ? Or were they assuming I would owe tax and were being penalised for not paying it ?

Surely it seems really unfair to have to pay the penalty on 0 tax?

 

(Yes I know I was months late and that was wrong but I never seemed to find enough hours to sit and finish it. Was eventually 4 months late...)

 

Does anyone have an idea on this ?

 

http://www.hmrc.gov.uk/sa/deadlines-penalties.htm#3

 

Length of delay Penalty you will have to pay

1 day late A penalty of £100. This applies even if you have no tax to pay

or have paid the tax you owe.

3 months late £10 for each following day - up to a 90 day maximum of £900.

This is as well as the fixed penalty above.

6 months late £300 or 5% of the tax due, whichever is the higher. This is as

well as the penalties above.

12 months late £300 or 5% of the tax due, whichever is the higher.

 

In serious cases you may be asked to pay up to 100% of the tax due instead.

These are as well as the penalties above.

[End QUOTE]

 

These are penalties for late filing, and independant of tax owed : so (even) with no tax owed the sums are:

1 day late, £100

90 days late, £1000

6 months late, £1300.

 

With tax owed, the late filing penalty sums remain the same, unless the tax owed is more than £6000, (where 5% will be greater than £300), while there is a distinct interest charge on late tax of 3% per annum, as well as penalty charges on the late tax, as well as the late filing penalties :

 

Length of delay Penalty you will have to pay

Thirty days late 5% of the tax you owe at that date

Six months late 5% of the tax you owe at that date. This is as well as the 5% above.

Twelve months late 5% of the tax unpaid at that date. This as well as the two 5%

penalties above

Edited July 9, 2012 by BazzaS

[HP Mum]

Thanks for this.

I have been late every year

And I never had to pay a fine previously when there is 0 tax to pay.

 

I can understand a penalty if there is money owed, but when one is scraping an existence and there is no tax owed, how can the IR make a claim for £1000 ??? They can not justify that as a viable expense. Is there means to query and protest ?

[HP Mum]

I mean, if one does not earn enough and has barely enough monthly to pay for necessities, then how can the IR make such a huge claim?

A payment of £1000 means no-one eats in our house ! Just for being late with some stupid paperwork.

 

I have just seen there are forms to appeal on their website.

Has anyone had any positive feedback from the IR using these forms ?

I guess these are the new punitive rules for this tax year.

[BazzaS]

I mean, if one does not earn enough and has barely enough monthly to pay for necessities, then how can the IR make such a huge claim?

A payment of £1000 means no-one eats in our house ! Just for being late with some stupid paperwork.

 

I have just seen there are forms to appeal on their website.

Has anyone had any positive feedback from the IR using these forms ?

I guess these are the new punitive rules for this tax year.

 

In previous years, they could charge a penalty (£100 from memory) for a late filing, even with no tax owed.

They have 'upped the ante' from 2010/11 tax year onwards ; and the penalties are certainly more severe.

 

As for appeals :

 

http://www.hmrc.gov.uk/online/excuse-missed-deadline.htm

 

Generally, a 'reasonable excuse' is when some unforeseeable or unusual event beyond your control has prevented you from filing your return on time. For example:

 

• a failure in the HMRC computer system
  
• your computer breaks down just before or during the preparation of your online return
  
• a serious illness, disability or serious mental health condition has made you incapable of filing your tax return
  
• you registered for HMRC Online Services but didn't get your Activation Code in time
  

[HP Mum]

Do you think that, in principle, the fines are there for those who owe tax and to frighten everyone into filing promptly? yet, with the right words one could possibly get off the penalty?

I mean, there must be lots of people who are late and physically do not have £1000 or more to pay.

What is the IR's position if the person just does not have the money ? Are they going to send them to jail ? Are they going to send the bailiffs round ? How do they intend to get non tax payers to pay ? Have they really thought this through ?

£1000 penalty is an impossibility for a lot of people.

Can't dig heads in the sand if the IR are only going to impose more fines for being late with the fine !!

Can't borrow money, can't earn it. So how does one pay ?

[HP Mum]

Not having a good day !

[BazzaS]

Do you think that, in principle, the fines are there for those who owe tax and to frighten everyone into filing promptly? yet, with the right words one could possibly get off the penalty?

I mean, there must be lots of people who are late and physically do not have £1000 or more to pay.

What is the IR's position if the person just does not have the money ? Are they going to send them to jail ? Are they going to send the bailiffs round ? How do they intend to get non tax payers to pay ? Have they really thought this through ?

£1000 penalty is an impossibility for a lot of people.

Can't dig heads in the sand if the IR are only going to impose more fines for being late with the fine !!

Can't borrow money, can't earn it. So how does one pay ?

 

 

If you are a non-tax payer, have you asked them why you are still being required to submit returns?.

After a few years of "none owed" returns they MIGHT stop asking you to submit returns, unless your situation is unusual?.

 

The previous late returns may have triggered the next year's demand for a return?

 

http://www.hmrc.gov.uk/sa/need-tax-return.htm

[HP Mum]

I mean that I am self-employed and am obliged to file self assessment return, but do not earn much. I did once, but last few years have been tough raising kids alone. I get help with working tax credits. Do the best I can and am hoping things will improve if I keep plugging away. In the meantime, am permanently exhausted keeping on top of things and yes have had family medical issues which really distracted early this year - another reason why I was so late. But bottom line is that this penalty is too punitive to pay - so what will the IR do? Keep increasing the penalty ? Force me to sell things to pay it ?

I will file the appeal - I think I have 30 days. But if they reject it, I wonder how they expect me to pay ?

[HP Mum]

Morning

A friend lives abroad (moved countries regularly) and has occasionally stayed with me when back in the UK.

I just received a letter addressed to my friend at my address. As I was expecting communication re my own tax return I opened the letter before realising it was for friend.

The problem is that the contents scared the living daylights out of me ...

it is a demand, with threat of bailiffs, for unpaid tax dating back many years totalling just under £200,000 !!

I am aware that debts can be recorded against properties - and I really do not want a black mark against me/my property as I may wish to sell it later ths year - so what action should I take ??

Am guessing this is serious !!

 

I have sent a message to friend asking what I should do, but so far have not heard back.

I am also aware that it could be a big mistake - that hmrc have made estimates as no returns have been filed due to friend being overseas.

But am really nervous....

[reallymadwoman]

Simple.

Reseal the envelope/tape it up then write on the front 'Opened in error, does not live at this address' and put it back in the post box.

If anyone knocks on your door asking for this friend all you need to do is state that they do not and have never lived there.

[HP Mum]

thank you. Will do.

[EagerElephant]

Debts are not recorded against properties they are recorded against the person.

 

HMRC do not report unpaid Tax on credit reports anyway.

 

HMRC are likely to make him bankrupt and if yours is the only address then you will get the letters. You are better off writing them a letter to explain the situation and giving them either his address abroad or an address of a relative otherwise they will just keep writing to him at your address. It is not unusual for people to return their own letters to HMRC as not living here as they want to avoid them.

Maybe send a copy of your council tax bill as well to prove who lives there.

[HP Mum]

HI Eager - I am not sure about that. I think bad debts registered at a property can affect me in the future. Will research this. But seem to remember reading that. Friend has been overseas for years and still has nfa - but have managed to advise of situation by sms. Am sure it will be sorted as no income earned here so won't be due most of what hmrc have estimated. But I still don't want to be hassled by them !!

[HP Mum]

I have no idea how they even got my address - other than maybe he had some mail forwarded once ??

[EagerElephant]

Trust me - debts are recorded against a person and not a property - anything you read which is different to this is lies. Check Experians website under FAQ.

 

Unless your friend completes the Tax Returns then how will HMRC know he had no income - I have known HMRC make people bankrupt for much less on estimated income/tax due so just be careful and contact them asap.

[HP Mum]

Afternoon all,

 

re Self-Assessment Self-employed Tax Return.

 

I missed the paper deadline of end Oct and missed the on-line filing deadline of end Jan.

Due to personal reasons - which are listed as IR reasonable reasons for being late - I ended up filing the tax return in July.

There was 0 tax to pay.

 

I then received a Penalty Demand of £1300 (1200 penalty & £100 automatic late fine).

 

I appealed in writing - within the 30 day limit.

I gave solid, sound reasons for being late filing, and presented evidence.

 

I have just received a letter saying they did not receive the appeal within the 30 days and do not consider my reasons as being pertinent to the time period. They were.

They are now demanding that I pay the Penalty.

I still disagree with their findings.

Plus it is impossible to find this penalty amount.

 

How can the IR demand £s from someone when it is clear that there is not enough income to cover the penalty demand.

 

What can I do?

Is there a certain letter to write asking for an reconsideration of their judgment?

[HP Mum]

Just for clarity - reasons were serious illness over long period & bereavements.

[blondebubbles]

Was your letter dated?

 

Do you have any proof you sent it in within the 30 days eg recorded delivery?

 

How far from the timescale do they think you were?

[HP Mum]

Evening

My correspondence was sent normal 1st class, unfortunately.

However, I do have a record of the day I sent it - which was on the 27th day (a working day) before the 30 days were up.

There should have been no reason for my letter to arrive after the 30 day deadline.

Other than the p.o. taking longer than normal or my letter sitting on someone's desk before opening for too long.

 

I just re-read their letter in closer detail.

They have added an extra letter of explanation against my reasons.

They write that they will only consider an appeal if an unusual or unexpected event prevented me from filing before the due date.

They have ascertained that there was nothing of that sort.

This is nonsense. I just don't think I was clear enough in my appeal letter. I wasn't thinking straight at the time.

 

This 2nd attachment letter advises that if I consider their view is wrong I can:

supply further info for consideration

ask hmrc to carry out an independent review

continue appeal by sending it to tribunal

 

I have 3 weeks to do any of these things. But can only choose 1. Can't ask for a review and apply to tribunal.

 

Does anyone have any experience of appealing an appeal?

Not sure what is best to do.

But I can not understand how they can not be more understanding/compassionate towards these particular circumstances.

[blondebubbles]

Evening

My correspondence was sent normal 1st class, unfortunately.

However, I do have a record of the day I sent it - which was on the 27th day (a working day) before the 30 days were up.

There should have been no reason for my letter to arrive after the 30 day deadline.

Other than the p.o. taking longer than normal or my letter sitting on someone's desk before opening for too long.

 

I just re-read their letter in closer detail.

They have added an extra letter of explanation against my reasons.

They write that they will only consider an appeal if an unusual or unexpected event prevented me from filing before the due date.

They have ascertained that there was nothing of that sort.

This is nonsense. I just don't think I was clear enough in my appeal letter. I wasn't thinking straight at the time.

 

This 2nd attachment letter advises that if I consider their view is wrong I can:

supply further info for consideration

ask hmrc to carry out an independent review

continue appeal by sending it to tribunal

 

I have 3 weeks to do any of these things. But can only choose 1. Can't ask for a review and apply to tribunal.

 

Does anyone have any experience of appealing an appeal?

Not sure what is best to do.

But I can not understand how they can not be more understanding/compassionate towards these particular circumstances.

 

I would follow all HMRC processes first so ask for a review.

 

If you are then not happy with that response you can go to tribunal, you just can't do both at the same time.

 

 

http://www.hmrc.gov.uk/complaints-appeals/how-to-appeal/direct-tax.htm#6

 

I can't comment on your last part as I know nothing of the circumstances but I have seen them remove penalties on grounds of reasonable excuse before.

[HP Mum]

Thank you.

Will work on a suitable reply this week and see where I get...

[HP Mum]

Hello

 

I am trying to work out if I may have a CGT liability coming up upon selling my house.

 

I bought the property 15 years ago.

Renovated for 2 years.

Rented the whole house out for next 1 year.

Then lived in it for 1 year.

Since then, 9 years, I have either done short rents - anything from a few weeks up to 6m - and around that rented rooms whilst living in it.

 

I have filed Self Assessment tax returns each year, including either Rent a Room page or the Land & Property page with the property income, less expenses and relevant % deduction of the interest only mortgage for my benefit of living in the property.

 

It is the only property I own.

 

When I rented the whole house out it tended to be around holiday time and if longer we stayed in a friend's place for free.

 

The property was also bought on a short lease.

After 14m of negotiations I have just finalised terms to buy the freehold.

It is now my intention to sell the property.

But I am nervous if I may have a CGT liability.

The value on the short lease is low. The value on the new freehold is very high.

There is a huge difference in the value of the property now compared to 15 years ago. I aim to sell it on the freehold / high value rate.

 

As the property is my only property / sole residence will I have a CGT liability?

And if so, how would I work it out - on the short lease value? or on the long lease / freehold value?

 

Also - for how long - without any rentals - would I have to reside in the property to not incur any CGT liability?

Or am I not due any CGT anyway as it is my only property?

 

Would be most grateful for advice.

Many thanks

HP

[HP Mum]

I filed 13-14 accounts late.

I paid £100 penalty in the summer.

Normally I receive a letter of acknowledgement of receiving my return and whether I have any tax to pay a few months after filing.

I didn't hear from them so I chased in Sept/Oct - when they said there had been a processing problem with a bunch of returns that came in around the time mine must have arrived.

Last week I just received notification that I had £0 tax to pay.

Yet this week I received notification that I had £1200 penalty to pay.

How can this be?

No tax; yet such an enormous penalty.

 

 

I don't have any 'valid' excuse for being late. And I don't have enough £s to pay it either.

What can I write to ask them to waive such a huge penalty??

Any kind of advice is welcome, thanks...