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Sam
Sam, Accountant
Category: UK Tax
Satisfied Customers: 6476
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
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I had a question/worries [about late self employment

Customer Question

Hi Sam! I had a question/worries [about late self employment registration] for you in september. i worked as self employed taxyear of 2014/2015. i registered bit late [in last month]. You told me i only might be penalised for late registration of self
employed [100 pound]. So i did register with HMRC and i got utr number.. But i got penalty notice of 100 and 300 pound for late self assesment/late paying tax few days ago. i just dont understand. Self assesment deadlines for tax year 2014/2015 is 31th of
jan. 2016 [is it right?] i just dont get it why they send me penalties? I am really really upset and feel helpless. i know there is payment on account deadlines i didnt pay that because i registered late an i earned 844 pound by my self employment [i checked
an summed up on my bank statements] and i earned around 3500 pound through tax year of 2014/2015 PAYE. Its still way under personal allowance i dont owe any tax. i just dont understand why they penalise me for no reason. What are penalties for miss deadlines
for payment on account/? Is it any chances to appael against penalties? What can i do? I am very desperate. Many thanks! M
Submitted: 1 year ago.
Category: UK Tax
Expert:  Sam replied 1 year ago.

Hi

Thanks for your question - you would have had a £100 penalty for late registration so have no idea where this additional penalty came from as this would indicate that you also should have filed self assessment for an earlier ax year (such as 2013 2014 - which you do not indicate is the case) and as long as you get your tax return in by 31st Oct (if filing a paper return or by 31st Jan 2016 if filing online)

So can you advise what explanations are given for each of these penalties as it would seem the wrong dates have been advised (either to HMRC or to me)

Thanks

Sam

Customer: replied 1 year ago.
Hi Sam!I got these letters in my hand i am quoting :" Your taxreturn for the year ended 5 April 2015 was not send on time Because of this penalty £100 is payable. This is accordance with paragraph 3 of Schedule 55 to the Finance Act" On this letter they make my attention to i get £10 daily penalties after three months.
In second letter : " Your tax return for year ended 5 April 2015 is now more than three months late . After 14 September 2015 a daily penalty of £10 payable each day your online tax return is outstanding for maximum 90 days . This is means you will have to pay is already over £300. To avoid further penalties file your tax return online now". Both letters have headlines :"Self assesment :Late taxreturn Notice of penalty assesment". I just dont really understand why they give me penalty for no reason. ? I registered as self emplyed corretly. I know is there "payments on account" what i didnt pay as i have no tax liabilities. What penalties for these? I dont know what need to do. I just feel like it was such bad idea to being honest with them and register as self employed with HMRC.
Expert:  Sam replied 1 year ago.

Hi

These are wrong - The tax return for year ending 5 April 2015 - has until 31/10/2015 if sent in as a paper return and 31/01/2016 if filed online -

This would only apply if relevant to a tax return for year ending 05/04/2014 or earlier. (so 2014 or earlier)

You should appeal on the basis that the deadline dates for the tax return are wrong

Or double check the letter that it does say year ending 2015

Thanks

Sam

Customer: replied 1 year ago.
Hi Sam!Thanks for your answer! I will appael against penalties- How can i do that? Do ineed any documents to show? I would have some question:
What are penalties for missing deadlines for "payment on account" (original deadlines for paying tax) ? Because i desperatly searched for information but i couldnt find any.
How long takes that HMRC take enforcement action if i dont pay penalties?
Many thanks!
Expert:  Sam replied 1 year ago.

Hi]

Just a hand (or typed) letter stating that you wish to appeal against the penalties as the tax return for 2015 cannot be possibly be late as the deadline is not until 31/01/2016!

So ask that they revise the charges

Make sure you quote the appropriate reference numbers from the penalty notce issued to you

Let me know if I can be of any furtehr assistance but it would be appreciated if you would take the time to rate (or click accept) to reflect the level of service you feel I have provided you with.

And do come back if you have any furtehr queries on this matter once you receive a reply from HMRC

Thanks

Sam

Customer: replied 1 year ago.
Hi Sam!
Ok! I will do that! Thank you very much for your answer! Can you also answer for these:
What are penalties for missing deadlines for "payment on account" (original deadlines for paying tax) ? Because i desperatly searched for information but i couldnt find any.
How long takes that HMRC take enforcement action if i dont pay penalties?
Many thanks!
M.
Expert:  Sam replied 1 year ago.

Hi

Sounds like you had been self assessment for some years and therefore missed payments based on those earlier tax positions - which might explain these additional penalties - due to late projected payments

Thanks

Sam

Customer: replied 1 year ago.
Hi Sam!
Thank you very much! I defenatly didn't have on self assesment for earlier years. Some more question:
If those penalties for missed deadlines for "payments on account" ( 31 of jan. 2015 and 31 of july 2015) how can i appael against these penalties if i don't tax liabilities?
Thank you very much for your answer !
Kind regards
M
Expert:  Sam replied 1 year ago.

Hi

Thanks for your further questions - if you were late with those earlier years tax returns (which HMRC seem to suggest that you were) and/or late with payments they believed to be due, then until such time that the 2015 tax return is sent in will they be able to officially establish whether you owed anything and review the late payment penalties. So its imperative you get the 2015 tax return in as soon as possible so these earlier year positions can be looked at

Thanks

Sam

Customer: replied 1 year ago.
Thanks Sam!
So these penalties for late tax payment from taxyear 2014/2015? Setting up taxreturn takes weeks to get ready fill . Is it possible to ask them to give more time to pay penalties? Or i have to pay those penalties immediatly?
Thanks!
M
Expert:  Sam replied 1 year ago.

Hi

Thanks for your response

Your questions have initially advised that 2014/2015 is the first year that you needed to be self assessment - and that you had only recently registered for self assessment which has led to these penalty charges.

From what you advise - it would appear that you have been in self assessment for some year and certainly have previously had a tax liability for these earlier years (so prior to 2014/2015) which was of such an amount (in excess of £1000) that this has created the need for you to have then been asked for payments in advance (known as payments on account) and its on this basis that these charges of penalties seem to have arisen.

Whether these payments on account have originally arisen from 2014/2015 (due to your earlier self assessment position) or related to another year - should be shown on the penalty charge notice, but IF they relate to late payment on accounts for 2014/2015 - then the filing on the 2014/2015 tax return will negate some of the penalty IF there is no any tax due, but it seems that this situation is more than just the 2014/20115 tax position, so this cannot just be looked at in isolation for a complete answer to be given.

MY advise pay the penalties by the charge due date (shown on the penalty charge notice) get the 2014/2015 tax return (and also any other years if applicable ) for HMRC to establish the total position, and then you can only appeal any remaining penalties if you think you have a reasonable excuse for why you failed to pay the payments on account at the appropriate time.

Thanks

Sam

Do you have any reasonable excuse, or have HMRC made a mistake and you have never been self assessment before 2014/2015 ?

Customer: replied 1 year ago.
Hi Sam!
Thanks for your answer . I only have been self employed for 2014/2015 tax year. I didnt work before this tax year at all. I don't know if its enough reasonable excuse. I only earned £844 . I shouldn't paid tax as i earned under personal allowance. I find these penalties extremly unfair because i didn't do anything wrong apart from late registration as self employed. Other thing i got big fear if i would pay these penalties and they will find have no tax liabilities for me i never get those penalties back. i can't afford to throw this such amount of money out of the windows. They have no law /rules for fines for missing payment on account and HMRC have power to fine any amount of fines which they wish.
Thanks
M
Expert:  Sam replied 1 year ago.

Hi

Thanks for your response

That is not what HMRC are suggesting - as their records clearly suggest that you are late with payments on account - which would NOT be the case if you had registered as self employed having started for any date AFTER 06/04/2014 (which would make 2014/2015 the FIRST tax year that you needed to file a self assessment tax return. So what date did you advise them you started self employment, had you EVER completed self assessment tax return before as they are applying the law to what they believe to be the case, and not just making up what fines/penalties they choose to apply - these have arisen for a reason and not just for the late tax return which you first advised was the case.

Thanks

Sam

Customer: replied 1 year ago.
Hi Sam!Thanks for answer. So it can be misunderstanding as they think i was self employed before years tax year 2014/2015? Or these penalties for "payment on account" for 2014/2015. ?
If i don't pay penalties in 30 day ( i try to appael) what can i expect (interest ..etc)?
Do you think i got chance to appael against penalties succesfully?
Many thanks!
M
Expert:  Sam replied 1 year ago.

Hi

Thanks for your further questions

They would not ask for payments on account (or charge penalties for them not being paid) unless they thought you should have completed self assessment for earlier years (no necessarily self employment as self assessment applies for lots of different incomes)

I also cannot advise whether this is a misunderstanding or not - you will need to ask HMRC why they make these charges, but based on what you tell me, this does not seem correct.

But I cannot say they have it wrong as you have not given me enough information about what you have been doing - and if you wish me to comment further or to help further then I will need to send an additional service request as this is far more complex and involved than you first suggested. (as per Just Answer policy)

If you do not pay the penalties and they prove to be right - then there will be interest and surcharges added on.

Thanks

Sam

Customer: replied 1 year ago.
Hi Sam!
One more question! I got tax refund this summer from taxyear 2014/2015. HMRC did'n't know about my self employment .Can it occur these penalties. ? If yes Can i appael against penalties? if yes how?
Thanks!
M
Expert:  Sam replied 1 year ago.

Hi

Did you claim this refund ? Why did you not advise this earlier - as clearly you have had money that might not be due

Thanks

Sam

Customer: replied 1 year ago.
Because i wasn't aware of my self employment those times. They automacly sent me. I got taxrefund. But if i add all of my income including self employed income i still earned under personal allowance ( i earned £3500 by PAYE -part of this has been taxed on 40% -thats why i got taxrefund plus £844 by self employment income) £3500+£844 is still under personal allowance. Can this occur those penalties? If yes can appael against fines and how? What is 3 pararagragh of 55 financial scheme means -what i mentonied earler (was on penalty notice). What can i do?
Thanks
M.
Expert:  Sam replied 1 year ago.

Hi

But you knew you had self employment - for 2014/2105 as this is what this whole issue is about - so by the tiem they made the refund you should have alerted them to the situation straight away and HMRC dont know you earned under the personal allowance until you submit your tax return at which time they will see the tax repayment is correct with it having been paid to you.

We have already established that £100 penalty is for late registration and the other £200 you advise relates to late payments on account - which I have answered fully - how this would have arisen.

The refund has nothing to do with the penalties, but you keep drip feeding information and I then you ask more and more questions which is far more than this question originally suggested.

Mya dvsier

1) Get that tax return in

2) establish with HMRC how payments on account arose as you state that 2014/2105 was the first year ever that self assessment tax returns were due - because of this small amount of self employment

3) if they have made a mistake then £200 of the penalties will be reduced to NIL but £100 will still stand for late registration

But you cannot keep expanding on this question, these should either be included in the original question or listed as new questions - as this has been ongoing since 29th Oct and with more and more information revealed each time I have fully answered the previous posts.

Thanks

Sam

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