Received massive fine from HMRC

Discussion in 'Accounts & Finance' started by Caius Cosades, Oct 13, 2018.

  1. Caius Cosades

    Caius Cosades UKBF Newcomer Free Member

    4 0
    I have a limited company, which has never traded. It was incorporated on Feb 7th 2016.

    I had important dates entered into my calendar in Mozilla Thunderbird, and was using an email address with a custom domain to receive notifications from the webfiling service among other things. At some point my domain expired without me noticing and my calendar had stopped notifying me for whatever reasons. I ended up missing some deadlines and everything spiralled out of control from there.

    I'm trying to make sense of what's happened and where I currently stand. Here a list of events so far. It's the first time I've compiled such a list; until now I'd just had a pile of confusing letters.

    On Feb 25th 2017 I file a confirmation statement made up to Feb 8th 2017 with Companies House.

    Letter from HMRC issued March 19th 2017 requesting a tax return for period Feb 9th 2016 to Feb 8th 2017. Not due for ages, so I do nothing.

    Letter from HMRC issued March 19th 2017 requesting a tax return for period Feb 9th 2017 to Feb 28th 2017. Not due for ages, so I do nothing.

    Letter from HMRC issued Oct 20th 2017 reminding me that a tax return is due on Nov 9th 2017 for period ending Feb 8th 2017. (Notice this says Feb 8th, not 28th. I don't think I noticed at the time.)

    Letter from HMRC issued Nov 13th 2017 reminding me that a tax return is due on Dec 1st 2017 for period ending Feb 28th 2017.

    Letter from Companies House issued Nov 17th 2017 telling me accounts for period ending Feb 28th 2017 are overdue and I have 14 days.

    On Dec 19th 2017 I file micro entity accounts (late) via the webfiling service at gov (dot) uk (slash) file-your-company-accounts-and-tax-return. If I remember correctly, this files the accounts with both Companies House and HMRC at the same time.

    On Dec 29th 2017 I pay a late filing penalty of £375. (Not sure where this number came from. Perhaps I've lost a letter.)

    At this point I thought I was in the clear. The webfiling service at Companies House was showing everything up to date and I'd paid my fine.

    Letter from HMRC issued Jan 31st 2018 reminding me that a tax return is due by Feb 28th 2018 for period ending Feb 8th 2017. It looks like I ignored this letter. Perhaps I thought it was referring to the period I had only recently filed for. It did after all say "Please ignore this reminder if you've already sent us the return...".

    On March 13th 2017 I file a confirmation statement made up to Feb 8th 2018 with Companies House.

    Letter from HMRC issued March 16th 2018 charging a £100 penalty for failure to file a tax return by Feb 28th 2018 for period Feb 9th 2017 to Feb 28th 2017. Payment is due by Apr 15 2018. I think must have not noticed the date range was different to the period I'd already filed for (it's only 20 days long). The Companies House webfiling service was showing everything up to date.

    Letter from HMRC issued March 18th 2018 requesting a tax return for period March 1st 2017 to Feb 28th 2018. Not due for ages, so I did nothing.

    On March 26th 2018 I pay the late filing penalty of £100 (see above).

    Letter from HMRC issued April 26th 2018 stating that I still owe £100 in penalties for failing to file tax return on time.

    On May 3rd I pay the late filing penalty of £100 confused as to why it's necessary, thinking I'd already paid it.

    Letter from HMRC issued Jun 18th 2018 charging me £200 for failure to deliver tax return for period Feb 9th 2017 to Feb 28th 2017, minus £100 "charged by previous determination" for a total of £100. Payment due by July 18th 2018.

    Letter from HMRC issued Jun 18th 2018 (same as above) charging me £200 for failure to deliver tax return for period Feb 9th 2016 to Feb 8th 2017, minus £100 "charged by previous determination" for a total of £100. Payment due by July 18th 2018. I thought the two letters were duplicates (they're not - look at the date ranges). I'm thinking, surely I've paid this by now.

    Letter from HMRC issued Jul 27th 2018. Final notice to pay £100 for overdue corporation tax debt for period ending Feb 8th 2017. Stupidly, I've started to ignore these. The letters say "If you've already paid, thank you. There is no need to contact us.". I thought I had paid. You don't get any confirmation via email or post when you pay.

    Letter from HMRC issued Aug 14th 2018. Final notice to pay £100 for overdue corporation tax debt for period ending Feb 8th 2017.

    The following letters all came through the post today:

    Letter from HMRC issued Oct 8th 2018 detailing my corporation tax liability (+ penalties) totalling £450.22 for period Feb 9th 2017 to Feb 28th 2017. The breakdown is as follows. Tax £400 (seems to be based on estimated profit of £2000), Penalties £240, Interest accrued £10.22, Already paid £200.

    Letter from HMRC issued Oct 8th 2018 demanding £40 (10% of the £400 above) for failing to file return for period Feb 9th 2017 to Feb 28th 2017. Payment is due by Nov 7th 2018.

    Letter from HMRC issued Oct 8th 2018 demanding £5285.51 for period Feb 9th 2016 to Feb 8th 2017. The breakdown is as follows. Tax £4600 (seems to be based on estimated profits of £23000), Penalties £660, Interest accrued £125.51, Already paid £100.

    Letter from HMRC issued Oct 8th 2018 demanding £460 (10% of the £4600 above) for failure to file tax return for period Feb 9th 2016 to Feb 8th 2017. Payment is due by Nov 7th 2018.

    In total I've paid £575 in penalties. It looks like now they want thousands in both tax and penalties. However, these sums seem to be based on estimated profits? (I certainly didn't make £23000 in a year as the company hasn't traded at all.) The tax is 20% of these profits, and the tax-penalties 10% of the tax. If I make clear that I didn't earn any profit during the period, will the tax liability and the tax-penalties go away? I'm certainly not paying the £5285.51 quoted on the final letter.

    Any advice on what to do next would be much appreciated.
     
    Posted: Oct 13, 2018 By: Caius Cosades Member since: Oct 13, 2013
    #1
  2. Mr D

    Mr D UKBF Legend Free Member

    9,765 1,018
    The tax return? As in your personal tax return?
    With your tax identifier as the reference?
     
    Posted: Oct 13, 2018 By: Mr D Member since: Feb 12, 2017
    #2
  3. Caius Cosades

    Caius Cosades UKBF Newcomer Free Member

    4 0
    No, all letters are addressed to the limited company.
     
    Posted: Oct 13, 2018 By: Caius Cosades Member since: Oct 13, 2013
    #3
  4. KAC

    KAC UKBF Enthusiast Free Member

    932 205
    The next thing to do is to appoint a qualified accountant to sort out your mess.

    It would have been cheaper than paying all these unnecessary penalties if matters had been dealt with correctly.
     
    Posted: Oct 13, 2018 By: KAC Member since: May 7, 2017
    #4
  5. TheCyclingProgrammer

    TheCyclingProgrammer UKBF Regular Free Member

    872 182
    It sounds to me like you still haven’t actually filed your accounts and tax return with HMRC. Have you? What does your online account show?

    I believe once you have filed your return showing the tax liability to be zero then the tax liability and related penalty will go away but the late filing penalties will stand.
     
    Posted: Oct 13, 2018 By: TheCyclingProgrammer Member since: Jul 15, 2014
    #5
  6. Caius Cosades

    Caius Cosades UKBF Newcomer Free Member

    4 0
    OK, thanks. I filed at least one set of accounts. I just found out I'm not registered for corporation tax, so signed up via online (dot) hmrc (dot) gov (dot) uk (slash) registration/newbusiness/introduction. I now have to wait to receive a code in the post before I log in.

    Well, obviously. It didn't make much sense to hire an accountant until I intended to start trading.

    I've successfully run another limited company, which I used for freelance work. I managed that for a few years without an accountant and had no problems at all.
     
    Posted: Oct 13, 2018 By: Caius Cosades Member since: Oct 13, 2013
    #6
  7. Jaydee

    Jaydee UKBF Enthusiast Free Member

    1,020 260
    There is nothing that you can do about the Companies house penalty (although if I am reading your first post correctly I believe that you have paid this now anyway). Just check Companies House online that nothing is currently overdue and what the next deadlines are.

    With regards to HMRC, however, you can have all the penalties removed (and claim a refund for the payments that you have already made) by writing a letter, enclosing the dormant accounts, and stating that the company is dormant and has been since incorporation and so no CT600 tax returns are due. In the same letter, also ask them to mark the file that no future tax returns will become due until you notify them that you have commenced trading.
     
    Posted: Oct 14, 2018 By: Jaydee Member since: May 27, 2007
    #7
  8. paulears

    paulears UKBF Big Shot Full Member

    3,495 838
    When HMRC write to you and you 'assume' you can ignore their letter, and the next and the next - at what point do you wonder what THEY will assume when you don't respond? Numerous requests, numerous no responses. Clearly, your choice to ignore them triggered a preset response. You need professional help quickly. I've never had any communication from HMRC in this style.

    My retired Tax inspector sister told me that when they finish one case, and moved to another, they look for things that look wrong. I guess you were top of the pile, a person, as they say, of interest.
     
    Posted: Oct 14, 2018 By: paulears Member since: Jan 7, 2015
    #8
  9. fisicx

    fisicx It's Major Clanger! Staff Member

    29,206 8,620
    Yes you do. You get an online confirmation when you make the payment and you get an email.
    Pay an accountant to sort it all out for you.

    Like @paulears suggests, ignoring the letters wasn't the best thing to do.
     
    Posted: Oct 14, 2018 By: fisicx Member since: Sep 12, 2006
    #9
  10. Scalloway

    Scalloway UKBF Legend Free Member

    13,818 2,953
    Posted: Oct 14, 2018 By: Scalloway Member since: Jun 6, 2010
    #10
  11. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

    12,259 2,282
    You are getting Companies House and HMRC requirements confused.

    What you should of done is dealt with the letters when they arrived.

    What you need to do now is to write to HMRC address your letter LETTER OF APPEAL and quote all of the reference numbers on the penalty notices - explain that your company has never traded and no tax is due and ask them to cancel the penalty notices.
     
    Posted: Oct 15, 2018 By: MyAccountantOnline Member since: Sep 24, 2008
    #11