Self-assessment late penalties - help required

Rosco83

Are there any HMRC employees/tax wizards on the board?

Around 3-4 years ago, I embarked on a masterplan to become an eBay millionaire. Unfortunately, after a few months of hard work for a little/no reward, my plan was soon dismantled. In the end up, I purchased about £500 worth of stock, sold about £200 worth of it and gave away the rest. I also sold a number of items via dropshipping (where i listed the stock on my shop and it was sent out by another company). Ultimately, i made a loss.

Before starting out, i followed a list advising me what to do to set up as a sole trader. Following this list, i registered with HMRC to do self certification. Unfortunately, I never submitted a self cert tax form detailing profits and losses nor did i advise them that i was no longer a sole trader. I also moved address around 1 year ago and collected my mail recently. HMRC are now saying i'm liable for around £1600+ of late fines etc.

I have been full time employed with my employer paying by PAYE for the last 13 years.

I'm about to write to HMRC and explain my situation. Could you please advise me what my best course of action is and does anyone know if they'll still hold up this penalty? It's really not something i can afford at the moment. Also, should i send on copies of all my ebay sales/purchases as evidence?

Any help is much appreciated.

ceeforcat

Three major question - does the £1600 include a determination? What is the breakdown? Have you submitted Self assessment returns?

There are many HMRC employees, tax consultants, ex- HMRC inspectors and accountants on here - not sure about wizards though!

Rosco83

ceeforcat wrote: »

Three major question - does the £1600 include a determination? What is the breakdown? Have you submitted Self assessment returns?

There are many HMRC employees, tax consultants, ex- HMRC inspectors and accountants on here - not sure about wizards though!

RE the first and second question, i'm away from home at the moment sans the HMRC documents so cannot give you full details. I'll have a search as soon as i get home. I do know that there was a threat of adjusting my tax code to collect monies but i don't believe this has been applied.

I have never submitted a return though. In all honestly, I blindly followed the 'list' without much investigation thinking i was following correct procedure. It wasn't until much later i'd realised i was being penalised for late/non returns. I had simply cast the letters aside unopened.

back_against_the_wall

Sounds like HMRC have been piling on the penalties following the late and non submission of your SA tax return for the year in question. I suggest you write to HMRC and say your business venture never got off the ground and you never made any money from it and it was abandoned long ago. Therefore you do not consider any penalties to be applicable as your tax liability from the business is nil. Also, from what you say this matter is a year old and HMRC have been somewhat lax in pursuing it.

kendall17

back_against_the_wall wrote: »

Sounds like HMRC have been piling on the penalties following the late and non submission of your SA tax return for the year in question. I suggest you write to HMRC and say your business venture never got off the ground and you never made any money from it and it was abandoned long ago. Therefore you do not consider any penalties to be applicable as your tax liability from the business is nil. Also, from what you say this matter is a year old and HMRC have been somewhat lax in pursuing it.

Good luck with that!

Which tax year is the return due from?

System

If it's a determination I believe the way to get it cancelled is to submit the completed return. Best speak to HMRC ASAP.

System

back_against_the_wall wrote: »

Also, from what you say this matter is a year old and HMRC have been somewhat lax in pursuing it.

Since the OP states that he moved address a year ago and only recently collected his mail I think it's unlikely that HMRC have been lax and the OP probably found several old letters from HMRC prompting them to file their returns.

To the OP file the outstanding tax returns, they should be really simple since you will be declaring loss for self-employment and 1 employment. You can then submit an appeal against any penalties.
If you need it HMRC have enquiry centres where you can make an appointment for help face to face.

John_Pierpoint

My local enquiry centre, which always seemed to be busy, has been replaced by one lady with a white telephone "hotline".

However there still seem to be 281 other options:
http://www.hmrc.gov.uk/enq/changes-ecs.htm

kendall17

ceiberman wrote: »

If it's a determination I believe the way to get it cancelled is to submit the completed return. Best speak to HMRC ASAP.

It depends how long the return is from.

Just had a case at work where my client emigrated and failed to fill in an 05/06 return. We have just attempted to submit it in the last 12 months and failed due to HMRC changing their rules on how long you have to submit a return to cancel their determination. The determination was for £1,100. His tax calculated totalled £56.

The only way to appeal against the determination was to submit a Special Relief Claim. This has since been thrown out by HMRC.

Our next plan of attack (I think) is to be to go on morality grounds.

System

kendall17 wrote: »

It depends how long the return is from.

Just had a case at work where my client emigrated and failed to fill in an 05/06 return. We have just attempted to submit it in the last 12 months and failed due to HMRC changing their rules on how long you have to submit a return to cancel their determination. The determination was for £1,100. His tax calculated totalled £56.

The only way to appeal against the determination was to submit a Special Relief Claim. This has since been thrown out by HMRC.

Our next plan of attack (I think) is to be to go on morality grounds.

Indeed. There is a time limit for overturning a determination with a return. If OP is right with his dates (3-4 years) they should still be in-date if they act quickly.

kitty1801

Hi.

Your best bet is to 'object' to the self assessment tax returns for 2010-11 and 2011-12 as these are the ones the big penalties are for. You need to contact HMRC (by telephone) to ask if these need to be completed, you will be asked some questions and they will more than likely cancel the returns & the penalties.

The other option, if you submit the returns for those years, is that the penalties will remain & you will need to appeal them, which is a lengthy process and may mean you still need to pay.

I would suggest completing the returns for 2009-10 and prior as the objection process isn't quite the same and if you owe nothing, the penalties will reduce to nil. In addition, you can offset your self employed losses against any PAYE income.