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Redd
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PostPosted: 20:41 - 01 Aug 2015    Post subject: The taxman Reply with quote

It's 2013, we claim child allowance because my salary is less than the cut-off limit. However, a surprisingly good bonus payment pushed it over the limit in Feb 2014, so apparently I needed to fill out a tax self-assessment for that year.

Now at work I'm super organised but the second I step out the door that's completely gone and my admin is shocking (MOT, VED, cancelling unused services, insurance, etc). So partly in denial, avoiding admin, and half a belief that since PAYE deals with all my other tax/NI, that it would all just sort itself out, I never quite got around to it. A couple of times I sat down to do it online to realise that activating your online account has to wait until they send out a code by snail mail. So it didn't get done - totally accept that this is my fault Embarassed

Probably shouldn't have ignored the warning letter (I'm sure I missed some mail because it seemed to escalate very quickly to the fine), but paid the late fine online and assumed that was the end of it - naive/deluding myself, I know.

Got back from holiday to find a letter telling me that they had penalised me another £300 and had been adding £10 a day for the last month, and the current penalty is over £600 !! Shocked !!

Funnily enough, this spurred me on to activating the account and filling out my self assessment online. There's an evening of anger and swearing at a computer that I'm never getting back. Upshot is that I owe them about £1700...and the ever increasing penalty.

Now if I were Vodafone, I'd call them up for a chat and tell them I'll pay 'some' of the tax and they get shove their penalty up their arse, but I'm not. I'm not 'happy' paying it, but by the flawed rule I owe it and I don't actually begrudge doing it that much. The penalty feels like a kick in the nuts though and I'm really not keen at all to pay that.

Yesterday after a call (38 minutes on hold, 2 minutes talking) to check that my understanding was correct, the call centre guy said that I should appeal it as they very rarely challenge them if the excuse is reasonable. So...I'm interested in suggestions on convincing grounds for not filling out my tax self assessment on time that will require no evidence to be manufactured Smile No doubt there will be moral judgement too Rolling Eyes


tl;dr;

Help me with ideas for a convincing excuse to appeal tax penalties.
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BrownTrousers
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PostPosted: 21:47 - 01 Aug 2015    Post subject: Reply with quote

HMRC wrote:
If you miss the deadline you can appeal to HMRC against some penalties as long as you have a “reasonable excuse” for filing or paying late.

HMRC said this is normally something unexpected or outside your control such as your partner died shortly before the tax return or payment deadline, you had an unexpected stay in hospital that prevented you from dealing with your tax affairs or your computer failed when you were preparing your online return. It said service issues with HMRC's website, a serious fire or postal delays may also be acceptable reasons.

But the taxman said it is unlikely to class bounced cheques, insufficient funds, difficulty using the online system or the lack of a reminder letter as reasonable excuses.


Not these real excuses tried though


Quote:
The ten worst excuses:

1. My pet goldfish died (self-employed builder)

2. I had a run-in with a cow (Midlands farmer)

3. After seeing a volcanic eruption on the news, I couldn't concentrate on anything else (London woman)

4. My wife won't give me my mail (self-employed trader)

5. My husband told me the deadline was March 31, and I believed him (Leicester hairdresser)

6. I've been far too busy touring the country with my one-man play (Coventry writer)

7. My bad back means I can't go upstairs. That's where my tax return is (a working taxi driver)

8. I've been cruising round the world in my yacht, and only picking up post when I'm on dry land (South East man)

9. Our business doesn't really do anything (Kent financial services firm)

10. I've been too busy submitting my clients' tax returns (London accountant)

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Itchy
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PostPosted: 22:03 - 01 Aug 2015    Post subject: Re: The taxman Reply with quote

Redd wrote:
Help me with ideas for a convincing excuse to appeal tax penalties.


I've worked in tax. The only ones that work are if you are seriously ill. Even then HMRC tends to want evidence. I had a woman who was seriously ill I mean life support and she racked up a ton of penalties

TBH I think you are SoL because there were changes in 2012 whereby the penalty for lateness cannot be appealed. Before this penalties were the lower of £100 or the tax outstanding. As such if you completed a tax return late if you owed no tax then you had no penalty.

In fact there was an unfair case here:

https://www.telegraph.co.uk/finance/personalfinance/tax/11528054/Student-hit-with-1300-tax-fine-over-university-project-but-he-cant-appeal.html

Whereby a tax return was submitted late and penalties racked up. It was considered terribly unfair but the penalty was NOT revoked. I'd note that HMRC are brutal and will close down viable profitable businesses for tax liabilities.

You can of course appeal as you're the responsible person.

Personally I would attempt the proportionate penalty route. Or the illness route IF you genuinely were ill. My mum for instance did her tax return late as she was undergoing surgery for cancer and was well out of it on Jan 31st.

This is the form.

https://www.gov.uk/government/publications/self-assessment-appeal-against-penalties-for-late-filing-and-late-payment-sa370
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smegballs
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PostPosted: 00:54 - 02 Aug 2015    Post subject: Reply with quote

Well seems to make more sense to hijack this than post a new thread...

I currently work job A, (min wage and full time) which has my normal personal allowance tax code on it. Soon I will be starting the better paid job B on about full time hours, but will continue job A a few nights a week for pocket money.

Obviously what will happen is that job B, which will be my new primary job, will have the BR tax code and thus I will get taxed to shit on it. How do I swap the tax codes around so that job B gets my personal allowance and pocket money job A gets the BR tax code?
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Itchy
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PostPosted: 01:33 - 02 Aug 2015    Post subject: Reply with quote

smegballs wrote:
How do I swap the tax codes around so that job B gets my personal allowance and pocket money job A gets the BR tax code?


Phone the tax office and tell them.
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mentalboy
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PostPosted: 02:46 - 02 Aug 2015    Post subject: Re: The taxman Reply with quote

Redd wrote:

... my salary is less than the cut-off limit. However, a surprisingly good bonus payment pushed it over the limit in Feb 2014, so apparently I needed to fill out a tax self-assessment for that year.

Help me with ideas for a convincing excuse to appeal tax penalties.


It has been a long, long time since I was on someone else's payroll and may well have changed but I'm quite curious about how it is that you say you are salaried (ie presumably PAYE) and yet the company can pay you a bonus that isn't taxed at source - is this the norm nowadays? Are you in an exempt industry?
I was under the impression when I was running PAYE schemes (late 90's, early 2000's) that ALL bonuses paid to employees counted as earnings and had to have tax and NI applied at source, no exceptions - employees loved hearing that they'd received Christmas bonus ... and not so happy that after PAYE there was usually diddly squat remaining!

Presumably the 'child allowance' is a modern equivalent of the child tax credit and that if you exceeded the threshold for eligibility this would be an overpayment issue as well?

Without knowing a bit more about the specifics and the kind of numbers involved it's tricky to suggest doing this or that but it does sound as though you've gotten yourself to the stage whereby it may be prudent to involve a tax specialist/accountant ASAP - something that'll strip any benefits you may have received with the bonus or even cost you more than it was worth!! Sad
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monkeybiker
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PostPosted: 07:36 - 02 Aug 2015    Post subject: Reply with quote

smegballs wrote:
Well seems to make more sense to hijack this than post a new thread...

I currently work job A, (min wage and full time) which has my normal personal allowance tax code on it. Soon I will be starting the better paid job B on about full time hours, but will continue job A a few nights a week for pocket money.

Obviously what will happen is that job B, which will be my new primary job, will have the BR tax code and thus I will get taxed to shit on it. How do I swap the tax codes around so that job B gets my personal allowance and pocket money job A gets the BR tax code?


Would job A be worth you still doing. Getting minimum wage with tax and national insurance knocked off. You would see less than £5 an hour from it. Are there travel costs?

You can use this to work out take home money.

https://www.listentotaxman.com/
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Itchy
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PostPosted: 09:57 - 02 Aug 2015    Post subject: Re: The taxman Reply with quote

mentalboy wrote:



I was under the impression when I was running PAYE schemes (late 90's, early 2000's) that ALL bonuses paid to employees counted as earnings and had to have tax and NI applied at source, no exceptions - employees loved hearing that they'd received Christmas bonus ... and not so happy that after PAYE there was usually diddly squat remaining!


Doesn't really matter if you get a notice to file a tax return even if you're PAYE 100% or have zero income you still have to complete it.

Before you could ignore it as there would be no tax outstanding and complete it as late as you wanted.
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Itchy
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PostPosted: 10:01 - 02 Aug 2015    Post subject: Reply with quote

monkeybiker wrote:


Would job A be worth you still doing. Getting minimum wage with tax and national insurance knocked off. You would see less than £5 an hour from it. Are there travel costs?

You can use this to work out take home money.


On a BR presumable they will take all the NI from the main job so only take income tax £6.50 ~ £5.20.

The quick and dirty rule is anything over £10000 you pay 34% of it (20% income tax and 14% NIC).
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smegballs
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PostPosted: 13:55 - 02 Aug 2015    Post subject: Reply with quote

monkeybiker wrote:
smegballs wrote:
Well seems to make more sense to hijack this than post a new thread...

I currently work job A, (min wage and full time) which has my normal personal allowance tax code on it. Soon I will be starting the better paid job B on about full time hours, but will continue job A a few nights a week for pocket money.

Obviously what will happen is that job B, which will be my new primary job, will have the BR tax code and thus I will get taxed to shit on it. How do I swap the tax codes around so that job B gets my personal allowance and pocket money job A gets the BR tax code?


Would job A be worth you still doing. Getting minimum wage with tax and national insurance knocked off. You would see less than £5 an hour from it. Are there travel costs?

You can use this to work out take home money.

https://www.listentotaxman.com/


Well I haven't crunched numbers yet but basically job B will be security guarding work, 2/3 days a week 12hr shifts for 80-90 quid a day. Current job is pizza delivery rider, with no real travel costs and piss easy job.

I was out of the country for two months of this tax year, and plan to go travelling again in march, so will probably not hit my personal allowance this year and will be able to claim back overpaid tax from either job next summer.

As such I see continuing with pizza delivery as bit of pocketmoney plus savings, as I will be claiming the tax back.
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mentalboy
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PostPosted: 14:41 - 02 Aug 2015    Post subject: Re: The taxman Reply with quote

Itchy wrote:
mentalboy wrote:



I was under the impression when I was running PAYE schemes (late 90's, early 2000's) that ALL bonuses paid to employees counted as earnings and had to have tax and NI applied at source, no exceptions - employees loved hearing that they'd received Christmas bonus ... and not so happy that after PAYE there was usually diddly squat remaining!


Doesn't really matter if you get a notice to file a tax return even if you're PAYE 100% or have zero income you still have to complete it.

Before you could ignore it as there would be no tax outstanding and complete it as late as you wanted.


Yup. I suppose it helped that someone drilled it into me at an early age that the one institution you ignore at your peril are the HMRC.
I presume they are the only government body that can legally kick your door in without a search warrant/court order?
Either way, OP still needs professional advice ASAP
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Itchy
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PostPosted: 15:47 - 02 Aug 2015    Post subject: Re: The taxman Reply with quote

mentalboy wrote:
I presume they are the only government body that can legally kick your door in without a search warrant/court order?
Either way, OP still needs professional advice ASAP



When Inland Revenue merged with Customs and Excise. HMRC got all of C&E's powers.

The major concern is next year or soon I forget the exact date but HMRC soon gets the powers to take directly from your bank account. If the debt is more than 1000 and they've sent you 4 letters.
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monkeybiker
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PostPosted: 16:23 - 02 Aug 2015    Post subject: Reply with quote

I wonder if we could vote to swap the HMRC for the mafia. They seem a lot more friendly Thinking
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Redd
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PostPosted: 13:35 - 03 Aug 2015    Post subject: Re: The taxman Reply with quote

mentalboy wrote:
...I'm quite curious about how it is that you say you are salaried (ie presumably PAYE) and yet the company can pay you a bonus that isn't taxed at source...


Bit of a misunderstand here. My bonus was taxed at source, but that put my earnings for the tax year above the limit for child allowance - which we'd claimed based off my salary with no bonus.

I've paid the principle amount of tax owed now, just the penalties left. Given the lack of suggestions for grounds for appeal here, I might as well just pay the penalties too Sad What a balls-ache Evil or Very Mad
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Itchy
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PostPosted: 13:41 - 03 Aug 2015    Post subject: Re: The taxman Reply with quote

Redd wrote:


I've paid the principle amount of tax owed now, just the penalties left. Given the lack of suggestions for grounds for appeal here, I might as well just pay the penalties too Sad What a balls-ache Evil or Very Mad


Do remember that even with the penalties you still have to complete the tax return. Since HMRC are a bit funny they'll probably ask you for another one next year too.

EDIT:

It's not that you can't appeal you can. But it is if you're convincing and if they buy it:

For instance

You didn't have to fill in a tax return

Doesn't wash as they send you a notice and they will use the sickpup defence against you. That once it goes into the post box...

You didn't get the notice of a tax return needed

Doesn't wash as above AND you phoned them up about it confirming that you knew about it. They also send reminders through the tax year.

HMRC gave an incorrect deadline

Doesn't wash as TV adverts, news paper adverts and also reminders gets sent.

You were not the person filing it

You're not responsible for the tax affairs of your employer so doesn't wash.

You filed it but internet failure prevented it from going through

Again you get a confirmation email of receipt shortly afterwards.

Posted a return on time and it got lost or HMRC did not log it

Interesting one this but the paper submission dates are different. HMRC indeed do not stamp tax return received dates and I've won numerous cases on this before 2010.

The taxpayer was ill, or had an accident, or something happened in the family

Again you can maybe say I didn't go on holiday! I was visiting my wife's sick mother overseas and therefore even though I knew there was a penalty I had no time in order submit my returns.

This might get the final £300 cancelled as you knew about it but couldn't do it. Therefore they may take leniency on these grounds.



Disclaimer I am not your tax advisor. You should seek independent financial advice. There is no contract implied or otherwise between any of the parties on this website and myself.
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Redd
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PostPosted: 14:11 - 03 Aug 2015    Post subject: Re: The taxman Reply with quote

Cheers Itchy Thumbs Up Yes, I've done the SA and the amount I've paid is the outcome of that. Think the excuses route to avoid penalties is not going to fly Sad
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stinkwheel
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PostPosted: 14:45 - 03 Aug 2015    Post subject: Reply with quote

My brother was let off a fine for a late VAT submission once after he wrote them a letter explaining he, his wife and two toodlers were all suffering from an explosive diarrhoea bug (they were).

Mind you, they don't get it all their own way all the time. I distinctly recall my Dad being instructed by the tax office to deduct a portion of an employees wages against an unpaid tax bill. He looked at it and saw there was no way the guy could live for the week on what this would leave. It also turned out this was tax the guy would eventually get back anyway in the fullness of time (the guy had been self-employed and they were trying to collect tax from this on top of the PAYE from his new job). So he refused and paid the guy as normal (manual worker so a cash pay packet).

The tax office were fucking raging but after they were done carrying themselves on about it and threatening him with all sorts, it turned out nobody involved could work out what the enforcement action for an employer refusing to follow their instructions were other than "Because you've got to." and "Because we say so.".
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