Appealing a penelty

daninmanchester

I got mixed up in the whole NHS restructuring and I was moved from one organisation to another.

I was employed by Royal Free London NHS Trust and was transferred to Public Health England.

This happened a few days before the end of the tax year.

Royal Free did not provide me with a P45 or any other statement of earnings. When I joined PHE I was not asked to complete a P46.

At the end of the financial year a P60 did not arrive.

I chased the Royal Free who very clearly said it was PHE's responsibility as I left their employment before the end of year.

I contacted PHE who advised that I write to them, I did and they failed to respond and I had to submit my tax return without the information, but I did declare it on my tax return as missing due to PHE not providing it.

As a result I underpaid tax by 1600. I am now being told I must pay this plus 15%.

I have a number of emails and letters that evidence that I was trying to chase this information in vein.

Employers have a legal obligation to provide this to me and the HMRC.
The HMRC had the information.
I didn't because PHE failed in their duties
Yet I'm being asked to pay over the odds.

Can I appeal on this basis?

i.e. the fine does not prevent or discourage this happening because it was a result of a 3rd party and I was transparent throughout?

sheramber

What tax year does this refer to?

Is the tax calculation based on the actual figures? If your emplyoer was deducting the correct tax due there should not be a tax underpayment.

The automatic penalty for late payment of tax is 5% at 30 days late (following the due date- 31 January,) 5% at 6 motnhs late and 5% at 12 months late.

If you have been charged 15% then that would indicate the payment is 12 months late.

You can always appeal but whether HMR will accept the appeal is another matter

aveylee

I've dealt with HMRC as an accountant (VAT rather than Income Tax) but from what you have said this would be a Schedule 24 Finance Act penalty for the submission of an inaccurate return.

If you submit an incorrect return (which it appears you did) and you did it carelessly they can charge you between 15% and 30% as a penalty.

You have several tactics you could employ to manage this,
1) argue that it was a Mistake Despite taking reasonable care. This means that you did everything that could be expected of a reasonable taxpayer. Stress the efforts you made to get your tax right and the fact that you believed you put down the right amount. If it was a mistake there is no penalty.

2) as stated previously careless penalty's can be suspended. You can propose a suspension condition saying that you will set up a system to record the receipt of all your tax documents in a filing system. This would help assist you in avoiding future mistakes on your employment income.

Important to realise (even if HMRC won't tell you this) is that they must suspend a careless penalty if a condition can be set. Suggest a condition and put the onus on them to argue against it.

No offence but the amount involved puts you near the bottom of people HMRC want to deal with, and the Inspector dealing with it simply wants to close the enquiry and move on.

Be polite but make it more effort than it is worth to continue the argument. If the Inspector is sensible!!! they will suspend the penalty and move on. However some of them can can be complete &^%^&$ and stubborn, in which case I recommend paying the penalty (if you have the money) and then asking for a review. Tie them up in paperwork and they may cut their losses, war of attrition and all that.

Finally even when arguing with them remain polite, 15% is the minimum and can be increased.

agrinnall

I can't really understand why you didn't insist that the Royal Free provide you with a P45 and PHE provide a P60, both of which they are legally required to do. But even then your payslips from the Royal Free would have given you everything that you need to complete SA accurately. Was the underpayment because your pay was at a level where PAYE didn't deal with it correctly, or did you have other income and/or benefits in kind that weren't taken into account?