Can we get out of paying this?

tesuhoha

My husband is self employed and very busy so I sort out his accounts. Unfortunately I am not very knowledgeable so I just put it all together and send it to the Accountant. Our accountant is normally very good and very cheap but this year he forgot to tell us, until a couple of days before he submitted the tax return, that because my husband had a good year the year before last that he would receive a large tax bill. Because I had not been expecting this I had no way of paying it when it arrived (£3600 approx). Therefore I telephoned the tax office and they said they couldnt talk to me so i wrote a letter to the tax man on my husbands behalf asking if we could pay in instalments. I even gave them our email address but there was no reply and I finally managed to pay the bill by using our Egg card as a mule card and getting it onto a 0% credit card. However, this has added to our debts which now total £18000+. A week afterwards we received a letter saying they could not help unless my husband phoned them and we're going round in circles because I can't get him to do things like that. He would rather pay up. Anyway, this week he received a letter saying that as the tax was not paid until 30 days after the due date we were going to be charged a surcharge of £181.72. I dont want to have to pay this as I am sure I paid it before then and I wouldnt mind paying reasonable interest but this seems like a very large amount for nothing. I am thinking of writing and asking them to waive this amount as a good well gesture, which has worked with the bank in the past but i havent tried it with the inland revenue. Any suggestions?

Batfink

I wouldn't ask for a good will gesture from the Inland Revenue - its not like you can take your tax elsewhere if you don't like the service is it?

Your Husband is just going to have to ring up and query it - if he won't then you'll have to pay it.

Note: it will be a penalty plus interest rather than just interest.

Phil

Justin_Credit

I am afraid that being self-employed like your husband is, he needs to be far better organised. He needs to know how much profit he is making so that he can work out roughly how much he will have to pay in tax and class 4 N.I. He can then put aside enough to cover it throughout the year.

I doubt if there is any way that he can get out of paying the late payment fine and interest. He knows as as every self-employed person does that the tax payment dates are 31st January and 31st July each year.

Regards JC

tesuhoha

Our accountant previously told us that we would be receiving a small rebate. He made a mistake. He is normally right and my husband normally produces enough vouchers and has paid enough tax over the year to cover the bill. He is a sub-contractor and his boss is very erratic and disorganised about giving out tax vouchers so we never know where we are regarding tax. i keep accurate records but i never know if the vouchers are accurate. they are most probably not. It is because my husband had a good year the year before last that we have received the bill. I have noticed that you can appeal against surcharges but they are very strict. I am going to send the letter anyway theres no harm in trying.

tesuhoha

I have paid it anyway.

ctm_2

as with everything, if you don't ask, you don't get. so it's always worth appealing against penalties and surcharges, and even interest if there is a genuine reason. However, don't get your hopes too high.

Remember though, that HMRC (H M Revenue & Customs, what the IR is now called since it merger with customs) will not usually consider any appeal against an amount until it has been paid. If the appeal is sucessful they will then repay it. You said you are sure you paid the amount before the 30 day limit for the surcharge. If you have proof of posting the cheque etc, then mention all of that. It might just be that it got delayed in the post or something.

Also, if you want to talk to HMRC you will need your husband to write them a letter saying that he gives his permission for you to act on his behalf, then they will talk to you and let you deal with everything for him.

Sarahsaver

Get someone else to do your accounts and book keeping, as If things had been dealt with competently you would have seen this coming.

Pennywise

Seeing as you are clearly blaming the accountant, why not demand that s/he pays your interest and surcharges. Presumably, you gave the accountant all the necessary paperwork long ago so that s/he had time to prepare the accounts and tax return, after all, you say it was the previous year that had been a good year. If, however, you were late to give the accountant all the necessary information, then you've only yourself to blame as s/he probably had to do it in a hurry at the last minute (together with all the other last-minuters). Just out of interest, when did you send everything to the accountant - if you sent it to them, say last Summer, then they really are to blame for leaving it so late. Most accountants will pay interest and penalties if they are really the ones to blame - my firm certainly do!

Mikeyorks

Had you made an instalment arrangement with HMRC before the 28th Feb - you would have avoided the 5% surcharge they have levied. As it is, your appeal stands little chance if you have listed 'took us by surprise' , 'didn't have the money' etc. You need to demonstrate that you were unable to deal with this, in the timeframe, (SA Asst issued mid Dec - surcharge not until 28th Feb !!) because of significant illness etc to stand much of a chance.

But (earlier post) you certainly don't have to pay before an appeal will be considered - that's silly. But it is wise to pay if the appeal relates to an amount which is continuing to accrue interest - as the appeal may take a while and the interest clock continues to tick in the interim

It may be worth your while, however, convincing yourself that all your husbands vouchers were available / accounted for. And you should talk to your Acct who should surely have checked that for every payment there is a commensurate voucher?

ctm_2

Mikeyorks wrote:

But (earlier post) you certainly don't have to pay before an appeal will be considered - that's silly. But it is wise to pay if the appeal relates to an amount which is continuing to accrue interest - as the appeal may take a while and the interest clock continues to tick in the interim

Apologies, I got what I posted a little bit wrong. Sorry for any confusion!

An appeal against a surcharge will not normally be considered until the payment on which the surcharge has been charged is paid, not the surcharge itself. So any appeal against the surcharge arising from the balancing payment would not be considered until the balancing payment itself had been paid.

Similarly with appeals against penalties for late filing of returns will not be considered until the return has been submitted.

It is worth paying the surcharge anyway, to avoid being charged interest on it if your appeal is rejected.

tesuhoha

I have paid both the tax (not in time) and the surcharge (in time). Thanks for all the advice. Our accountant is a personal friend and has his own problems so I dont like to penalise him but our accounts were handed to him in October and I would have thought that was enough time. He said that there were enough vouchers. I wrote yesterday pointing out the time line involved when I tried to arrange instalments and how they (the Inland Revenue) did not respond until after the deadline had passed. Hopeful but not confident this will sway it. Will keep you posted.