Just taken on a new client who is a mobile hairdresser. She has been self-employed for the last 3 tax years and never completed a self-assessment. She now has penalties and is paying them weekly.
I have submitted the online return and will be doing the paper ones this evening for the previous years.
I need some guidance on how to word a letter to HMRC as I want to appeal my clients penalties on the grounds that it is her first offence, she is a single mother earning very little and now has someone doing her tax returns every year so it will not happen again.
What are the chances that the remaining penalties will be removed once the Tax Returns have been received by HMRC and also in receipt of an appeal letter?
I don't hold out much hope of the penalties being waived, but certainly worth a try. I had a client, who having started her business on 2nd April thought she didn't need to file a return until the following year, assuming that her year ran 1st April - 31st March. Inland Revenue wanted a return from 2nd - 5th April and issued a penalty. After becoming involved I appealed on her behalf but they turned it down.
Why paper returns out of interest? If you're doing the latest one online can't you do the other two online as well?
Hi Elaine
Im speaking from a moral view - why should she get away with not paying penalties when she clearly knew that she was breaking the rules earning money for three years and not attempting to pay tax nor find out what kind of tax bill she has, or not. I hate that the single mother card is likely to be used in these circumstances - I am a single mother and worked hard and paid my tax!! Sorry but I dont think you should be fighting for getting anything back except for the fines since you took over perhaps (ie at that date she started to do something about it/need time to sort blur blur, although thats still all her fault so why the revenue would be soft on her is in doubt). Leave her to fight the battle I say. Wonder is she has put all her cash clients through!
Right I will get off my high horse now!
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
If we are to start talking from some view of morality, my starting point would be that penalties should be progressive and proportionate, rather than absolute and virtually indiscriminate.
The carpet bombing of computer-generated one hundred pound penalties for the merest reporting mistake, misunderstanding or even actual fault - that is what is iniquitous, the more so when HMRC can be so lax, so unconcerned and so untouchable when failing its own responsibilities to taxpayers.
I have found the effort of interceding for any of my clients, who might have erred against the Almighty Rules, has been worth it for my client relationship, and generally successful. Full marks to Elaine for wanting to go the extra mile for her client.
If these median income figures on pg11 are correct and the average tax bill for the self employed is under £500 then what are we doing charging multiples of £300 for late filing? If the tax is paid eventually, these are not just disproportionate, they are immoral.
Let's not pretend they are about enforcing the rules when they are merely using the self employed as a milch cow. These are the people who work longer hours and are entitled to few benefits and statutory rights. It would make just as much sense to fine a new employee a hundred quid for not handing in their P45.
I do think the penalties draconian once the £10 a day kicks in, but ultimately the responsibility still lies with the tax payer to get the return done in time.
my starting point would be that penalties should be progressive and proportionate, rather than absolute and virtually indiscriminate.
The carpet bombing of computer-generated one hundred pound penalties for the merest reporting mistake, misunderstanding or even actual fault - that is what is iniquitous, the more so when HMRC can be so lax, so unconcerned and so untouchable when failing its own responsibilities to taxpayers.
I should have probably added, as I do agree with you Andy and Tim, that the penalties are not proportionate and carpet bombing is a huge mistake!
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
