HMRC insist on sending a tax return for 21/22, after we've already made a declaration and paid a penalty

[kp278]

Hi, we have been ebaying since 2020 and never told HMRC. Ultimately it caught up with us around middle of 2023, we made a declaration for the periods 20-21 and 21-22 and paid what we owed plus the penalty.

A couple of months later we sign up for self-assessment in readiness for submitting the 22-23 tax year and receive a letter asking us to complete a tax return for 21-22.

We spoke to them but they insist because we were self employed in that period and earned over £1k we reach the threshold for submitting a tax return. In our eyes we've already paid the tax owed for 21-22. What am I missing?

Many thanks

[honeybee13]

Hi.

I can't answer your question but I think I know a man who can. I'll flag this for team member @slick132, hopefully he'll be along later.

HB

[slick132]

Hi KP,

1. When you declared trading income for 20-21 and for 21-22, did you discuss with or declare to HMRC other income (PAYE or S/E earnings, savings income, etc)?

2. You say "we" so did HMRC assess you and your partner together for the eBay trading?

3. Did you submit the 22-23 return(s) by the paper deadline of 30-9-23 or online deadline of 31-1-24?

Regarding your primary question about the need to submit tax return(s) for 21-22, it's probably better to just comply and file the return(s) regardless of you already paying tax and penalties for the tax year.

[kp278]

Hi thanks for your input

1. I cannot recall. Usually I'm good at taking a photo of everything for my records but I neglected to take photos of the declaration before I sent it in. I did consider other earnings when calculating tax owed as I recall we were very close to the limit for the higher tax bracket. I likely need to file a SAR with hmrc to get a copy of the submitted paperwork for my records and to aid in completing a tax return for the same period, if needed.

2. It is in my partners name only.

3. Yes I employed a (semi) professional. A friend of the family who is a corporate accountant by trade but is extending into personal accounts.

I've submitted an online form 'if you no longer need to send a tax return' and referred the case reference for the declaration.

[slick132]

Hi KP,

You say you "did consider other earnings when calculating tax owed" .  I think 2 points arise :-

First, you need to distinguish between your own and your partner's tax affairs. The extra tax due on eBaying sounds like it was YP's issue so surely HMRC considered all YP's income when determining the extra tax owed.

Second, is this thread about YP's tax affairs, your own, or both ?

Re my Q3. above, I was not concerned about who submitted the tax return(s) but am more concerned that any return was submitted by the appropriate deadline.

[kp278]

Hi, everything is related to my partners income and tax return, mine is not in play, apologies for any confusion on that.

 

 

 

 

 

[slick132]

Hi KP and thanks for the clarification.

So did YP submit the 22/23 TR by the relevant deadline to avoid late penalies ?

Re the original question you asked, I still think YP should file a 21-22 tax return if it'll keep HMRC happy. Fail to do so and you could end up with penalties and further hassle you really don't need.

[kp278]

Hi, yes 22/23 was submitted before Jan 2024 deadline so no penalties

 

I received a reply to "I've submitted an online form 'if you no longer need to send a tax return' and referred the case reference for the declaration."

Their response is Yes - "You need to fill in a tax return because you have recently been advised that based on your gross earnings within the 21/22 tax year, you will still need to file a return."

 

I've submitted a SAR because I don't have to hand the details we submitted for the 21/22 disclosure and I'll obviously need these to fill out the tax return.

MP is going to call the team that dealt with the case ref and confirm with them if I need to fill out the return. I expect it'll be of little use.

 

Still frustrated that MP has to fill out a tax return despite making a disclosure for the same period.

 

Thanks, Kris

[kp278]

MP spoke to the disclosure team who were very helpful, but they told us if we submit a tax return, we will likely need to pay the taxes again, then call the disclosure team and get a refund....! I've made a complaint to hmrc in the meantime, but still preparing to file a tax return at the last minute.

[slick132]

How mad is that, telling you to pay and then seek a refund.

If it were me, I'd submit a written complaint about their advice to pay again !