Late end of year return penalty

[Bob]

How frustrating is it to be sent a 2010 £400 late filing penalty for a company that ceased to trade on 3th November 2008, filed final accounts and paid the corporation tax, sent in a final P35 for year ended 5th April 2009 and was struck off on 5th January 2010?

Shall I waste my time appealing on just let them carry on sending demands

Would ring them to let them know but they'll either not answer the phone or put me on hold and it's an 0845 number so I'll have to pay

Not sure that I can be bothered to write to them now that they don't supply "postage paid" envelopes

So glad I don't have to deal with their total incompetence on a day to day basis any more

 

[mr. mischief]

they are pants. i got a phone call from a client with a £400 late filing penalty today.

Thing is, she came to me in July and we wrote in early August to explain that her previous accountant died suddenly in April, with all the client's records - and hence no filing could be done.

I am thinking of beginning the next letter:

"Dear HMRC,

I would like to come to your offices to hold a seance, with a view to finding out from my client's deceased accountant how we can submit the information you require......"

Is a pack of Tarot cards a tax-deductible business expense in this case?

 

[Bob]

"Dear HMRC,

I would like to come to your offices to hold a seance, with a view to finding out from my client's deceased accountant how we can submit the information you require......"

Is a pack of Tarot cards a tax-deductible business expense in this case?

It wouldn't be quite as good as the letter sent to the Collector of Taxes (we had one in those days) by my principal when I was first articled.
In those days there was no such thing as an insolvency practitioner - anyone could have a dabble. He had got himself appointed as Liquidator of a circus and the letter went along the lines of "Thank you for your letter asking for settlement of the outstanding tax liabilities. Unfortunately the only remaining asset in my hands is an elephant and the elephant has just died." Never did find out what happened to the carcase but I do recall someone telling me in later years that the elephant was a bad tempered animal anyway and that was why he hadn't been able to sell it before it died !! I think that that was actually the last he ever heard from the Collector on that case

 

[elaine@cheapaccounting]

Just had the same yesterday for a client - good to see that HMRC are wasting money trying to collect debt from a company that doesn't exist. A 30 second check would reveal this to them.


Yet again the incompetence of this Gov. department shows no bounds!.

 

[Tom McClelland]

Just had the same yesterday for a client - good to see that HMRC are wasting money trying to collect debt from a company that doesn't exist. A 30 second check would reveal this to them.


Yet again the incompetence of this Gov. department shows no bounds!.

The check shouldn't even take 30 seconds. Since these letters are being produced by software it would be a trivial matter for the software to check that the company is still on the CH "active" list.

 

[elaine@cheapaccounting]

The check shouldn't even take 30 seconds. Since these letters are being produced by software it would be a trivial matter for the software to check that the company is still on the CH "active" list.

good point Tom - I was giving them the benefit of the doubt this morning which I know is not like me.

Someone really needs to take HMRC in hand and eliminate all of these time wasting / costly mistakes.

It will cost to put it all right now - what a complete waste of tax payers money.

Come on Cameron - less of the tax investigation increases and more of getting your own house in order first

Time for tea

 

[David Griffiths]

I've lost count of the number of times that I have had to write to HMRC to point out that a client is no longer an emloyer. It's fair to say that they never take any notice the first time, and all too often it takes more than five letters.

Their system, or rather lack of it, is nothing short of a disgrace.

 

[elaine@cheapaccounting]

Their system, or rather lack of it, is nothing short of a disgrace.

here here

(gosh - agreeing with David - appointment for doctors needed asap )

 

[Bob]

Overcame my qualms about paying for a stamp or a telephone call. Just scribbled comments on it, put it back in the envelope and posted it 'Return to Sender'

 

[Property Angel]

OMG i am a new employer and this is the first thing i have seen about filling in an employer annual return. I have never recieved anything to ask me to complete anything or knew anything about a deadline or anything. I have been paying HMRC quarterly online and was wondering what i was meant to do but nobody ever askd me so I just kept paying and thought at some point they would get in touch - well not just with a £400 fine!

I am lost. I work so hard to keep the business going through these times and this just feels like a kick in the teeth and makes me wonder why i bother.

I have tried calling them but their pc's are down (convenient) so can;t access records

Have i any chance of appeal? Also what should i do next I am very lost!

 

[Alpha]

How frustrating is it to be sent a 2010 £400 late filing penalty for a company that ceased to trade on 3th November 2008, filed final accounts and paid the corporation tax, sent in a final P35 for year ended 5th April 2009 and was struck off on 5th January 2010?

Shall I waste my time appealing on just let them carry on sending demands

Would ring them to let them know but they'll either not answer the phone or put me on hold and it's an 0845 number so I'll have to pay

Not sure that I can be bothered to write to them now that they don't supply "postage paid" envelopes

So glad I don't have to deal with their total incompetence on a day to day basis any more

If it is Merthyr that you had to call I wouldn't bother as they are permanently engaged

Actually I have a letter from that office that states that filing is incomplete as I haven't provided the directors reportand balance sheet. I have filed this online with the accounts attachment as a pdf and guess what.......the pdf has the complete set of accounts so how can it not be complete

 

[elaine@cheapaccounting]

OMG i am a new employer and this is the first thing i have seen about filling in an employer annual return. I have never recieved anything to ask me to complete anything or knew anything about a deadline or anything. I have been paying HMRC quarterly online and was wondering what i was meant to do but nobody ever askd me so I just kept paying and thought at some point they would get in touch - well not just with a £400 fine!

I am lost. I work so hard to keep the business going through these times and this just feels like a kick in the teeth and makes me wonder why i bother.

I have tried calling them but their pc's are down (convenient) so can;t access records

Have i any chance of appeal? Also what should i do next I am very lost!

Have you received a fine then?

In the eyes of HMRC ignorance is no defence and a basic requirement of being an employer is an annual return.

I don't think you will have clear grounds to appeal a fine if you did not file one.

 

[David Griffiths]

OMG i am a new employer

How new? If you've only started employing people since 5 April, then you wouldn't be required to make a return until April next year.

If you employed people last year then you might have a problem.

 

[MyAccountantOnline]

OMG i am a new employer and this is the first thing i have seen about filling in an employer annual return. I have never recieved anything to ask me to complete anything or knew anything about a deadline or anything. I have been paying HMRC quarterly online and was wondering what i was meant to do but nobody ever askd me so I just kept paying and thought at some point they would get in touch - well not just with a £400 fine!

I am lost. I work so hard to keep the business going through these times and this just feels like a kick in the teeth and makes me wonder why i bother.

I have tried calling them but their pc's are down (convenient) so can;t access records

Have i any chance of appeal? Also what should i do next I am very lost!

Have a read here this might help -

http://www.hmrc.gov.uk/paye/payroll/year-end/annual-return.htm

 

[Tom McClelland]

My understanding (correct me if I'm wrong, accountants), is that the fine is capped at the level of the PAYE/NI underpayment by the employer for 2009-10. So, once you've filed, if it turns out that in fact you paid them in full for that year, on time, the fine will be capped at £0.

But maybe I misunderstood? :| Perhaps I'm thinking of a different fine that works that way.

 

[elaine@cheapaccounting]

The fine for late filing of a P35 is £100 / month. I think you are taking about late payments

 

[elaine@cheapaccounting]

see here for details:

http://www.hmrc.gov.uk/paye/problems-inspections/annual-return-late.htm

 

[elaine@cheapaccounting]

Just to add that I think this is one of the highest flat rate fines / penalty for filing of late paper work (rather than fines / penalty for unpaid tax).

£100 / month

Anyone else comment?

 

[David Griffiths]

The fine is capped at the "total liability payable by 19 April" subject to a minimum penalty of £100

This is by concession, not by law

Link - towards the foot of the page

 

[elaine@cheapaccounting]

The fine is capped at the "total liability payable by 19 April" subject to a minimum penalty of £100

This is by concession, not by law

Link - towards the foot of the page

By concession being key

 

[Tom McClelland]

The fine is capped at the "total liability payable by 19 April" subject to a minimum penalty of £100

This is by concession, not by law

Link - towards the foot of the page

I thought that I'd heard that somewhere. Thanks David. I forgot about the £100 minimum (but it still means that the agitated 12Pay client I just spoke to has a fine of £100 rather than £400, I think, because he says he paid in full on time)

 

[David Griffiths]

Just to add that I think this is one of the highest flat rate fines / penalty for filing of late paper work (rather than fines / penalty for unpaid tax).

£100 / month

Anyone else comment?

CIS penalties are higher.

PAYE is £100 per month after the year end filing date. CIS is £100 per monthly return per month, with overriding penalties at the year end. So don't file anything all year, and you have £15,000 worth of penalties - even if there weren't any subbies.

That's £1,200 for the first return, £1,100 for month 2 and so on. And when each return is over 12 months old, there will be an extra £3,000 per return.

 

[Property Angel]

I am an idiot. I have been paying HMRC online for the paye and tax but knew nothing of the P35 forms (for year 08-09). I have tried to use the HMRC site in the past but find it very complicated.

Anyway, I understand this is may fault - yes i'm ignorant.

I've got my accountants to sort the payroll out.

I'm just gutted as I thought I was pootling along well. This has been a nasty and expensive shock.

I just find it unreal that they don't bother telling you when it is due and then wait 4 months to fine you. What a lovely system they run

 

[elaine@cheapaccounting]

2008 - 2009 - that should have been filed by 19 May 2009

then you have 2009 - 2010 by 19 May 2010

 

[Property Angel]

Yes I know that now from this fine

My issue is why I was not informed prior to this date?

Nice they can fine me, shame they can't remind me. Just a little bit of help for a small business owner would go a long way from HMRC

 

[Tom McClelland]

They do in fact send letters to the address they have on file for every employer reminding them of the need to file P35/P14.

It is annoying, and curious, that they don't send out the fine notices in May rather than October.

But as David has found the link on the internet, the fine appears to be £100 in total for each PAYE year that you forgot to file, as long as you actually paid the total PAYE/NI due for each year by 19th April. The fine for late filing is only larger than that if you were late paying the bill. If it weren't for that concession you'd right now be facing fines of c. £2000 rather than £200.

 

[Property Angel]

Thanks I am going to send this link (thanks David) to the accountant now sorting out my payroll. I wouldn't mind I haven't been trying to avoid tax or NI - i have been paying online! If i hadn't been paying then yes I understand I have done something wrong!

I literally knew nothing of this p35 form and that's what I have an issue with. And to then tell me 4 months later so they can impose a £400 fine! It just gets me. I was doing our own payroll as i needed to cut costs to keep us going and now this

So I have learnt it is a false economy to try and do all these things yourself!

 

[elaine@cheapaccounting]

They do tell you.

When you register as am employer they send you all sorts of guides and then they send you a letter about the P35 being due.

Are you sure you haven't receive these?

 

[Property Angel]

Not to my knowledge as anything I recieve I call the accountant and ask what am i meant to do!

Anyway, now I guess I have learned my (expensive) lesson and will get someone who knows what they're doing to sort this

 

[elaine@cheapaccounting]

They do in fact send letters to the address they have on file for every employer reminding them of the need to file P35/P14.

It is annoying, and curious, that they don't send out the fine notices in May rather than October.

But as David has found the link on the internet, the fine appears to be £100 in total for each PAYE year that you forgot to file, as long as you actually paid the total PAYE/NI due for each year by 19th April. The fine for late filing is only larger than that if you were late paying the bill. If it weren't for that concession you'd right now be facing fines of c. £2000 rather than £200.

hold on - sorry to be the bearer ..

If the failure goes beyond 12 months then in addition penalties under Section 98A(2)(b) may also be considered ECH21025.

2008 / 2009 goes beyond 12 months

 

[Property Angel]

Oh crikey so I'm lucky with a £400 fine! Jesus this just seems so out of proportion - my wage bill is only £1500 per month (we're having to run a tight ship!)

 

[elaine@cheapaccounting]

Are you sure the £400 is for 2008 / 2009 and not 2009 / 2010?

 

[Property Angel]

no it was 2009/10. my mistake

 

[Property Angel]

Classic - the accountants have sorted and I have overpaid by over £600 and haven't even claimed SSP I was entitled to!

GRR even more annoying to get fined when I have overpaid as well!!

 

[elaine@cheapaccounting]

Classic - the accountants have sorted and I have overpaid by over £600 and haven't even claimed SSP I was entitled to!

GRR even more annoying to get fined when I have overpaid as well!!

oh dear - maybe someone to do the payroll would help

 

[Property Angel]

yes - they now are! they could've saved me a lot of money, time and hassle!

This is a classic reason why business owners should get on with what they do and allow the experts to do what they do!

 

[Tom McClelland]

yes - they now are! they could've saved me a lot of money, time and hassle!

This is a classic reason why business owners should get on with what they do and allow the experts to do what they do!

Of course there is software around that prompts you in such a way that it is easy for you to get all the PAYE/NI/SxP stuff right yourself. We've only had a couple of sites (out of many thousands) call us up in the last week about getting a, "naughty boy, you haven't filed your P35" notice. And actually one of those sites was an "expert" (ie external accountant/bureau calling about one client that they'd forgotten to file) and I'm not sure about the other one.

This year's 12Pay software has a new feature which actively nags you (from mid-April onwards) to file the previous year's P35/P14 until it sees that you've done that.

 

[Tom Egerton]

I can trump all of your stories. Just had a very upset partnership client who ceased trading in April 2008 receive a penalty for £1,200 for allegedly not submitting a 2005/2006 year end PAYE return. They clearly had lost the return but did nothing for four and a half years between 19 May 2006 and September 2010 - T**s***.

 

[Tom McClelland]

Why, exactly, did these letters not go out on the 27th May? There would be absolutely nothing stopping HMRC nagging people straight away. They don't get anything more than £100 from the people who'd paid on time, so why do they terrify people with the wording of the letter? Some of the people hit with these letters will get very distressed.

 

[Tom Egerton]

But in my client's case they can hypothetically increase the penalty by 1,100% by waiting 4 1/2 years - not a bad rate of return.