HMRC Tax Penalty

[MotCO]

Reading HMRC guidance, I understand that HMRC will either write to me or email me to request a tax return. I have received neither, and upon further investigation, I expect to be notified by email; I have checked all my email accounts and folders / spam etc, and cannot find any such emails.

By complete chance, today I opened my Government Gateway account and found 6 unread mesaages, and was astounded to find that I have been penalised over £1,000 for non-receipt of a tax return. The latest message was a reminder, and I have rechecked my emails for that date and I have not received any emails advising of a new message as apparently is meant to happen. On this basis, I am fairly certain that I did not receive an email alerting me to the message requesting the tax return.

I have sent off an appeal against the penalty, quoting non receipt of a request, and that my income is below the threshold requiring a tax return. Can anyone advise the likelihood of being successful in my appeal? Has anyone had a similar experience? The penalty is charged on a daily basis; having appealed, does the clock stop? I have swiftly completed my tax return and filed it with HMRC, and paid the unpaid tax of circa £50.

 

[Mcr Warrior]

Presume this was for the tax year ended 05APR2022. Question... If your income was "below the threshold", what did the unpaid tax of £50 that you've paid relate to?

 

[MotCO]

Presume this was for the tax year ended 05APR2022. Question... If your income was "below the threshold", what did the unpaid tax of £50 that you've paid relate to?

To clarify: the threshold I was referring to was the income level for submitting a tax return (£100,000)*, rather than the tax free threshold (£12,570). And yes, it was 2021/22.

* https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return

 

[4COR]

To clarify: the threshold I was referring to was the income level for submitting a tax return (£100,000)*, rather than the tax free threshold (£12,570). And yes, it was 2021/22.

* https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return

Still doesn't clarify what the £50 was for (interest on savings? Capital gains?).

Unfortunately, it explicitly states that not getting a reminder is not a reasonable excuse for not meeting a tax obligation - see: https://www.gov.uk/tax-appeals/reas...se is something,dealing with your tax affairs

I wish you luck, but, given the lack of movement over thresholds, there will be a heck of a lot of people caught out in the years to come for things like not submitting a tax return, where child benefit is claimed, and yet taxable income is over £50k...

 

[MotCO]

Still doesn't clarify what the £50 was for (interest on savings? Capital gains?).

Yes, tax on savings

 

[4COR]

Really tough one, I wish you luck. Lots will also fall into this trap I fear.

 

[avid2424]

There is an HMRC checker. Just Google - do I need to do a Tax Return. Work through the 10 or so questions. The answers do not get sent on. So be truthful

The questions are set for the year to 5 April 2023 - but please answer as if they were for the year to 5 April 2022

If you get the result that you do not need to do a Tax Return, then phone up HMRC and ask them to withdraw their request for a Tax Return. It would be easier if you had not swiftly completed the Tax Return

From what you say, you should get the result of no Tax Return needed, BUT it would continue: CONTACT HMRC to arrange to pay the tax (figure not specified) owing on the interest

Obviously also work through the checker re the year to 5 April 2023 - to work out whether you need to do another Tax Return, or get the request cancelled, and find out if you simply have to arrange to pay some tax

You will see from the checker that it is not just £100,000, but there are other trigger points that give a requirement to do a Tax Return, such as a gig where your total from gigs is more than £1,000

Never rely on HMRC sending any emails, even if they have got the correct email address for you

You say you swiftly completed your Tax Return. Not certain what portal you used, but that would have been saying for some 18 months that HMRC wanted a Tax Return for the year to 5 April 2022. Does it say that HMRC now want a Tax Return for the year to 5 April 2023?

Did you do a Tax Return for the year to 5 April 2021? If so, HMRC would set their records that they would want a Tax Return every year - until you make the phone call to get the requests cancelled

Also HMRC do not pick on you out of nowhere. You would have told HMRC that you need to be doing Tax Returns. Hence the name Self Assessment. You have to do all of the running, to get in and to get back out

== Doublepost prevention - post automatically merged: 4 Oct 2023 ==

If the penalties are not cancelled, you have done enough to stop any more penalties. Although if you do have to pay penalties, interest will be charged right through to the date that you pay off the penalties

== Doublepost prevention - post automatically merged: 5 Oct 2023 ==

If you are paying tax of £50 on bank and building society savings interest that would mean total interest of £625 or more - but the first £500 taxable at 0%. And you would be thinking, how do I pay the £50 of tax? You should not be sitting around and thinking: do nothing as I have not received any request for a Tax Return

 

[MotCO]

There is an HMRC checker. Just Google - do I need to do a Tax Return. Work through the 10 or so questions. The answers do not get sent on. So be truthful

Yes. When I was submittimg my appeal, I used this checker and the answer was 'No' - I did not need to send a return

From what you say, you should get the result of no Tax Return needed, BUT it would continue: CONTACT HMRC to arrange to pay the tax (figure not specified) owing on the interest

Are you referring to the tax owed on the interest on my savings account? In which case, yes, I have now paid this.

Obviously also work through the checker re the year to 5 April 2023 - to work out whether you need to do another Tax Return, or get the request cancelled, and find out if you simply have to arrange to pay some tax

For 'belt and braces', I will shortly submit a 2022/3 tax return.

Never rely on HMRC sending any emails, even if they have got the correct email address for you

The first unread message I found said "Whenever you have a new online tax letter, we will email to let you know."

Did you do a Tax Return for the year to 5 April 2021? If so, HMRC would set their records that they would want a Tax Return every year - until you make the phone call to get the requests cancelled

Yes I did. Over previous years I probably was not asked to send in a tax return more than being asked, so I was not surprised not to be asked for a return for 2021/22

You say you swiftly completed your Tax Return. Not certain what portal you used, but that would have been saying for some 18 months that HMRC wanted a Tax Return for the year to 5 April 2022. Does it say that HMRC now want a Tax Return for the year to 5 April 2023?

Yes, once I realised a tax return was overdue I found the tax submission portal, updated the year to 2021/22 and completed the return. I have been asked for a 2022/23 return - message dated April 2023, but I have only just read it, not having previously been advised by email that a new message was waiting.

If you are paying tax of £50 on bank and building society savings interest that would mean total interest of £625 or more - but the first £500 taxable at 0%. And you would be thinking, how do I pay the £50 of tax? You should not be sitting around and thinking: do nothing as I have not received any request for a Tax Return

I think my tax code had previously been amended for some business expenses, so I probably had too much tax free allowance.

Thanks for your detailed reply. I must admit I am not hopeful in getting a successful appeal, but I don't think HMRC having acted correctly on their side in respect of sending emails. It was pure chance that I spotted this, otherwise the penalty would be racking up even more.

 

[avid2424]

I was very happy to reply

If the tax was only re business expenses, and simply a wrong code number, HMRC should have done everything by changing a future code. (And you might have signed up for Self Assessment Tax Returns many years ago for some other reason)

Are you able to view your detailed coding notices.

If the tax was only re business expenses, and simply a wrong code number, it is quite likely that an HMRC computer has amended your current code - so that you end up paying the £50 twice. ONCE by you paying direct, and ONCE by HMRC quietly changing your PAYE Code

The HMRC computers re PAYE Codes and Self Assessment Tax Returns are quite often not linked, meaning that HMRC have got their eyes on TWO OF YOU

I am going to guess that HMRC do not have a correct email address for you - and especially a mistype re Self Assessment (as they could easily have the correct one ONLY within the PAYE Code records)

You would not have sent in an email to tell HMRC of your email address.

You would have used a form, and probably an online form, and it is so easy to mistype your own email address. More so, if you were doing it in a hurry, and/or thinking that it is only for the taxman

Is there a person information area within the "Self Assessment Tax Return" portal that does show your email address

HMRC do have viewable information, which you might see through the Self Assessment Tax Return portal, such as three phone numbers (daytime, evening and mobile) one email address and (um) one fax number

 

[Howardh]

I had to submit a tax return as my saving interest was just over £10k; as it happened my other income + that £10k just fell below the threshold for playing tax; so I submitted a form and was informed "no tax to pay"
Have a feeling next April with savings interest now more than double, I'll be handing them a cheque! But as the OP suggests, their information as to what they want you to do is sparse and you really need to keep an eye on gateway and their app, very little seems to come through the post.
I found out yesterday that my tax code had changed via a pay-slip from a small pension which can only be accessed on-line.

 

[MotCO]

HMRC do have viewable information, which you might see through the Self Assessment Tax Return portal, such as three phone numbers (daytime, evening and mobile) one email address and (um) one fax number

In my profile, there is an email address, which, although not my usual address, I do regularly access. The profile says that they will email me when there is a new message; I have rechecked the email account in my profile, and I have not received an email in my inbox, spam or trash folders for the recent message they sent me.

I suppose it is possible that they manually wrote the email address which I supplied, and it was incorrectly transcribed. Is there any way of asking HMRC which email address they use for me?

The profile page only shows my postal address and home address, NI Number and contact preferences. There were no telephone numbers. Because of this **** - **, I have changed my contact preferences to post rather than email. I wonder if that will work? .

== Doublepost prevention - post automatically merged: 5 Oct 2023 ==

If the tax was only re business expenses, and simply a wrong code number, it is quite likely that an HMRC computer has amended your current code - so that you end up paying the £50 twice. ONCE by you paying direct, and ONCE by HMRC quietly changing your PAYE Code

I don't mind if I am overcharged tax by £50 - it's the £1,000+ penalty I cannot stomach.

 

[MP33]

I have just received my assessment for the last tax year. Thanks to the rapid rise in interest rates, I had to pay them £500. This year, I am keeping a spreadsheet and I expect that I may just creep into the 40% bracket.

 

[MotCO]

Update: I received a letter from HMRC asking me to contact them - presumably it was a letter since I had changed by contact preferences. The letter was from their debt collection department. I explained the circumstances and that I had lodged an appeal, which they could not find, but suggested I phoned another department.

I spoke to a very pleasant young woman (it was her first week in the department), and she seemingly spoke to her bosses about it. The upshot of it is that they have waived the penalty charge.

I checked on the portal, and the latest statement says that I have overpaid tax by more than the amount of tax arrears I paid!

So a good result all round.

P.S. And it only took 20 minutes for them to answer the phone on both occasions!

 

[4COR]

That's a great result! Especially only 20 min on hold!!