Late tax return penalty- can it be voided?

skepchical

My partner has just received a penalty (£200 total) for not submitting a tax return. In the last tax year he was self employed as an internet researcher from home, but definitely did not exceed his tax code allowance (around £5,000). However, he paid his National Insurance throughout this period (around £2.10 a week).

He didn't do his tax return through laziness, so I believe he should cough up. He just got a full time job so can pay this, but at a detriment to his ability to pay extra off his mounting credit card bills.

Essentially he is entirely to blame for his predicament, (and I am worryingly becoming entangled in his financial knots, despite being good with my own finances), but I would love to be able to tell him the penalty could be dropped if he talks to the IR about this.

Any advice is greatly appreciated.

ctm_2

He has two penalties of £100 each. The first imposed because the return wasn't received by the due date (31 Jan) and the 2nd because it still hadn't been sent in by 31 July (6 months later).

He can appeal against the penalties in writing on the form provided when he received the penalty notice. This must be done within 30 days of the date of the appeal notice. If later than that then HMRC do not have to accept the late appeal.

An appeal will not be considered until the return is filed.

He will need to provide a reasonable excuse as to why his return was late, and HMRC will then decide wether to cancel the penalty or not.

When a return is filed if the total liability is less than the total of the penalties, they will be reduced to that amount. THis means that if the total liability is £50, then the total penalty will be £50. If there is no liability the total amount of penalties will be reduced to £0.

Basically, he should complete his return, and appeal in writing as soon as possible.

mtem74

From what you have said he has no reasonable excuse so likelyhood is that if any penalties are charged he will have to pay them. i doubt he'd get off on appeal

skepchical

He came home and I confronted him with the "good news", and he pointed out that from talking to IR the penalties are actually from tax year 2006/7.

It turns out the original fine was sent to our previous address which we moved out of in January 2007. I still don't know where this leaves him, and he's not massively impressed with me sticking my nose in.

Sigh.

Thank you to the above posters for their help.

The_Tax_Man

There is no need to appeal. Your husband should complete his tax return declaring all of his income and provided his income is less than his personal allowance the penalties will be cancelled automatically.

Tax legislation provides that interest and penalties in respect of a return can not exceed the tax owing by the filing deadline. If you husband has no liability then he has no penalites to pay, but he does have to file a return to get the penalties cancelled.