Problem with Tax Penalty Notices

nonnymc

This is a bit of a long story so please bear with me.

In Sep 2005 my wife and I started a Kleeneze business. We were both listed as partners but any tax documentation that we received was addressed to her and she filled it in and paid all necessary tax on the business. At no point did I receive any forms, reminders or correspondence from the HMRC. The Kleeneze business finished in late 2006.

In the last few weeks I have received multiple partnership and self assessment penalty notices. It seems that I had self assessment forms to fill in and apparently I was the primary partner so I had partnership forms to fill in as well. As this was never done I now owe the HMRC nearly £1600 in penalty notices.

I rang the HMRC when the first penalty notices arrived and was told they told me about the partnership and self assessment issue. The lady I spoke to believed that the cause of the problem was that we had moved house in April 2008, but this makes no sense as my wife continued to receive self assessment forms, reminders, etc... and it didn't explain why I hadn't received anything previous to April 2008. She mentioned that they tried to contact me in August 2008 but the letter was returned. Yet again this makes no sense because when we moved we had all mail redirected for 6 months from our old address to our new address. The lady we spoke to said that she would send the necessary forms for me to fill in and I'm waiting on them to arrive.

I was hoping that someone who has had a similar experience might be able to tell me how strict the HMRC are on these things considering all tax was paid on our earnings from the business and this mix up is down to bad communication that I would blame on them. Also is it their fault or mine that I never received the forms? At the time we assumed that the forms they sent my wife were the only ones we had to fill in as they were the only ones we received. Is it okay to claim ignorance as I was honestly unaware that I had self assessment and partnership forms to fill in? One other point, when we moved house in April 2008 it was because we had bought our own place. I had two credit checks done when applying for the mortgage and both were fine. Would any HMRC penalties appear on credit checks?

Thanks in advance for taking the time to read this. Any advice or comments would be much appreciated.

chrismac1

You go the distance with this. You ask for specific evidence of anything they say they have done. There have been tribunals where, for example, simply posting a tax return has been good enough for the judge to quosh a fine. Or where having a PDF of the return you planned to submit was good enough, even though for some reason it did not get submitted.

Their story here simply does not stack up. How have they managed to let fines clock up so high? There is another Tribunal case from 2011 where - on PAYE - a £400 fine was thrown out becuse HMRC should have fined the guy £100 but waited 4 months by which stage the fine had grown 4 times.

In the end at the very least you'll get a substantial reduction in my view.

Mikeyorks

You can't plead ignorance because you knew you'd registered for self employment and in a partnership.

If you've paid all the tax due (not sure how you know that if you haven't filed Returns and presumbly have other income) then all the late filing penalties (other than the £100 for 10-11 if they're asking for that) will be negated when you file the outstanding ones. Provided there was no tax due.

HMRC penalty notices don't show on a credit search.

nonnymc

Thanks for the replies guys.