Hmrc

Shane-H

Hi all,

I registered as self employed a few years ago as I was trying to set up a business. The business was a big mistake so closed it down 3 weeks later and closed my self assessment account. I thought because the business had taken no money and had closed down within a month I wouldn't need to file a tax return.

Last year I started receiving letters from HMRC saying I owed them £1300 I looked into this more and saw it was all late payment penalties and fees so I filed a tax return immediately which confirmed that I owed nothing.

My question is do I need to pay the £1300 as it is all penalties for an account I had closed down.

Any responses would be great!

Thanks,
Shane

Brightspark87

Hi

Have you spoken to HMRC with regards to this? Technically you should have filed a self assessment, however make sure you go back to them with all your paperwork.

I deal with HMRC for clients and normally they can be quite reasonable.

Good luck!

Shane-H

Brightspark87 wrote: »

Hi

Have you spoken to HMRC with regards to this? Technically you should have filed a self assessment, however make sure you go back to them with all your paperwork.

I deal with HMRC for clients and normally they can be quite reasonable.

Good luck!

I called HMRC about this a while ago and they seemed really harsh. I explained the situation to them and asked why I needed to pay such a large amount. They said they were penalties which I could appeal against so I said I would and asked for the appeals procedure to which she replied asking me on what grounds I would be appealing but I had no idea.

Brightspark87

Did you tell them you were no longer self employed and did you restart employment>?

Can I suggest that you formalise all your paperwork (confirming when you started self employment and finished) and write to them. Send it recorded explain the situation and explain that you feel the charges are too much given the circumstances and you would be happy to pay any tax due but you did not have any profit etc.

You would have filled in a self !!! but given the time scales were so small you could did not know you had to do it.

Def worth a shot?

hohum

How did you 'close down' your self assessment. Did you notify hmrc in writing?

If you register as self employed, you have to file a tax return. You include employment income in your tax return, and you have to file one even if you didn't bring in any income through self employment. You basically tell them about all income. You would be sent notification that you must complete a tax return. Did you receive this?
The notification explains penalties if you don't file. You would need confirmation that you no longer have to file a tax return.

If you didn't properly unregister as self employed I wonder if some of that debt is class 2 national insurance. If it is you can write to them requesting exemption from these charges under the small earnings exemption. But you will need to have proof of your earnings eg a tax return for that year or accounts for your closed down business.

You need to be clear what the penalties are. You could ask hmrc for a statement. I would be honest with hmrc - don't go banging on about how you shouldn't pay the charges. Explain you don't understand what the charges are, that you were only self employed for a month, you're in a bit of a pickle and what should you do?

Then I would get a friend who is familiar with self assessment and employment to figure out what the issue is. My gut feeling is that you should have been completing self assessment returns. You will probably be able to get a lot of the penalties removed by providing correct info.

With hmrc the onus is on you to provide the info proving you don't have to pay, otherwise they just assume you do. Hmrc are also one you would be wise to not ignore. It sounds sortable with paperwork but you mustn't hope it will go away by ignoring it.

You may end up with money still owing, but it will likely not be as much as £1300