Long time since I've been on here but you're the first place I've come to for a little help!
Long story as short as possible for now:
My partner started in business as a budding actor officially back in July 2015, when taken on by an agency. At the time I said I would help sort things out for her as she is in no way mathematically/record keeping/tax inclined.
My first mistake was to forget about letting HMRC know within 3 months of the business starting. I just thought and said to her that I'd have an easy tax return to complete pre Jan 31st 2017. (15/16 = no tax due as she is under her allowance overall. The self employed work itself may even be zero profit once I have tallied the expenses. Plus, it is only 1 single job she undertook that year, a few hours at £500)
Unfortunately I've practically had a break down through personal circumstances and ended up letting her down. I'm out of work, signed off, in debt, and at risk of homelessness. I tried to rally around end January time but left it all too late to receive the UTR & activation code for SA through the post. So from my understanding I said I'm sorry, it'll be a £100 late return fine and I'll sort it after a few weeks rest through Feb etc.
Well I had a terrible February personally/mentally, effectively lost my job and earnings in March, and then ended up suddenly waking up one morning in late April to a shock. I was checking my email and read an accounting web newsletter with warnings about being 3 months late and the sudden incurring of circa £1300 fines.
Through my struggles I'd forgotten everything important and so I was now practically too late to even get her 15/16 return in by end of April 2017. I made many phone calls attempting to speed up the situation. Fast track a UTR. Try and find out if there was anyway to fast track the SA activation code. Finally came across Gov Verify as an option, downloaded an app, uploaded documentation and got her verified, accessed the usual SA account page, only to find out I could only "submit 16/17 tax year" and not 15/16. That was in the last few days of April therefore the end of the road. We had to wait for the activation code to come through, which has arrived today.
So now I can submit 15/16, late, automatic fines applied. These fines will ruin us, financially and relationship wise I expect. In your opinions and experiences is there any point or likelihood of success in appealing with a fleshed out version of my circumstances, or indeed anything else I should consider? Of course I am aware HMRC view her as liable for her own submissions and therefore her fault if someone she relied upon didn't come good.
As it happens through all the phone calls to varying HMRC departments (many of which were poor, wrong or incomplete advice and ridden with inappropriate attitudes) I now have authority to deal with all her tax affairs, not just a call by call basis. But I doubt that will impact upon their view that she is solely responsible for getting things in on time.
Your time reading and imparting any help and advice is greatly appreciated.
Many thanks,
Shaun.
-- Edited by Shaun UK on Monday 8th of May 2017 06:19:02 PM
My first suggestion would be to get the 15/16 return filed as soon as possible, as far as fines are concerned my way of thinking is that you have incurred an automatic £100 late filing penalty for missing the 31st Jan deadline and you are now starting to incur daily penalties of £10 per day for being more than 3 months late that would have started on May 1st and can continue up to a maximum of 90 days, so at the moment your penalties would amount to £180.
You can try appealing to HMRC against these fines but they seem very strict to what is a "reasonable excuse"
HTH
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
When did you first notify HMRC of the need to file a tax return? You should get 3 months from that date to file before penalties kick in. I can't identify from your post whether that was in January or in April when you started panicking. If January, as Doug says penalties will only be £180 if you file tomorrow. If April there shouldn't be any penalties to pay.
When you go to file it should tell you the last date they are expecting a return to be made.
Definitely worth a shot at appealing in my opinion. Be concise and to the point, and offer an apology. If they say no, you haven't lost anything.
Best of luck and hope your situation improves for you.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Now, if there was £0 tax to pay and your return was late, that's what, if filed and paid today? £180 /£190
But you can't have a fine for submitting a tax return late if you're not registered for Self-Assessment.
There may very well be a fine for failure to notify, which given the information you've supplied won't be much. (Well it is a lot if you don't have it spare, but I hope you see my sentiment)
Get it, file it and don't let it worry you to illness.
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
Doug, John and Johnny/Abacus(?)...thank you so very much for your replies and for reading through the long post. Also thank you for the well-wishes.
The consensus on fines being circa £180/90 is certainly encouragement. From what I had read I thought the £10 per day fine that kicked in from May was backdated to include every day since February 1st. That is where I got my over £1000 figure. I truly hope it is £10 a day beginning in May.
John, I think the first phone call to the self assessment team that definitively informed them of possible 15/16 liability was when I was attempting to fast track a UTR at the end of April. I don't believe I did anything in the system as such back in January that led to any awareness of a return being necessary. At end January I simply generated a Gateway user and password, then left it where I wasn't sure whether to do an SA1 or CWF1 online. I don't believe I made any calls to HMRC back then.
Also John, I tried to sign in (via both gov gateway & verify) just now to see the final date you mentioned, but the access code to log in has been sent to my partner's phone...at work! So I'll check that later.
Overall fine wise, I was fearing:
Failure to notify
Missed online filing date
3 month late £10 a day Feb through to date
I had some understanding that some penalties are tax geared, so if there is none to pay then certain penalties won't apply. But I imagined that only relates to late tax interest/additional penalty %'s on top.
I'll get onto finalising the return asap and try hoping for the best as opposed to too much expecting the worst!
John, I think the first phone call to the self assessment team that definitively informed them of possible 15/16 liability was when I was attempting to fast track a UTR at the end of April. I don't believe I did anything in the system as such back in January that led to any awareness of a return being necessary. At end January I simply generated a Gateway user and password, then left it where I wasn't sure whether to do an SA1 or CWF1 online. I don't believe I made any calls to HMRC back then.
Looks like you'll have 3 months to file from when you were advised of the need to complete a 2015-16 tax return, so you should be ok regarding any penalties.
Also John, I tried to sign in (via both gov gateway & verify) just now to see the final date you mentioned, but the access code to log in has been sent to my partner's phone...at work! So I'll check that later.
I'm not familiar with 2 step authentication (yet) but if it doesn't accept the code sent to your partners phone try it again, as the code could be time limited
Overall fine wise, I was fearing:
Failure to notify Missed online filing date 3 month late £10 a day Feb through to date
I had some understanding that some penalties are tax geared, so if there is none to pay then certain penalties won't apply. But I imagined that only relates to late tax interest/additional penalty %'s on top.
If tax is outstanding, and you're late paying it, there's a 5% penalty. I don't think that'll apply in your case (assuming partner hadn't already used up her tax allowance eg employment)
-- Edited by Leger on Tuesday 9th of May 2017 06:54:10 PM
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Glad you seem a bit more upbeat today than you did when posting yesterday
When I replied about the fines I thought you had already notified HMRC of the self employment but as both John & Johnny have rightly said if you have not notified them then no late filing penalties should apply.
The only penalties that you may be liable for are failure to notify which as far as I am aware is based on a % of any tax that is due and from what you have said amounts to Nil, (depending on what other income your partner received during the year)
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
I don't think penalties apply anymore for late registration but I'm getting conflicting advice when googling.
Hi John
As far as I am aware penalties can still be imposed for failure to notify by October of your second year of trading, the penalties are based on a % of the "potential lost revenue" but have different degrees of charges depending on if it is deemed to be deliberate and concealed, deliberate and not concealed or any other case but ranging from 0% up to a maximum of 100%
Have a look at FA2008 Sch41
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
In general I would agree Johnny but in this particular case the person didn't actually go into self employment properly.
I had a lady who had done a similar thing to Shaun's partner and started self employment but only did one month, earning £500. She told me that she signed on after that and was told there was no need to worry about the £500 self employment as they would deal with it. She had registered for self employment but didn't fill in a return and ended up with £1600 worth of penalties. I appealed on her behalf and got the penalties quashed.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
As soon as any stock for the purposes of trade is bought, or any man / woman is prepared to offer their knowledge as a service, self employment should be declared. Declared on date of initiation.
Just my thoughts.
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
In general I would agree Johnny but in this particular case the person didn't actually go into self employment properly.
I had a lady who had done a similar thing to Shaun's partner and started self employment but only did one month, earning £500. She told me that she signed on after that and was told there was no need to worry about the £500 self employment as they would deal with it. She had registered for self employment but didn't fill in a return and ended up with £1600 worth of penalties. I appealed on her behalf and got the penalties quashed.
I agree with Johnny - bit of a loophole open to abuse. I think there are a lot of people who set up, do one month or a few more and then pack it all in, mainly because business ideas have not been thought through in the first place (everyone seems to think its easy to work for yourself!) or are frankly non business ideas in the first place. Of course £500 of income can be resolved generally through the tax code system even when youve been asked for a return - if of course it is dealt with in a timely fashion. HMRC will even deduct some low level expenses before they collect the rest through coding if its handled in the right way.
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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
