Self assessment penelty

MrYoungg

Hi everyone,

My wife came to UK in 2014. She registered as self employed but never made even close to 10k earnings. As far as she was aware, if you don't earn more than 10k you don't have to do any self assessment. Now we know it is not true. I was always working for someone so don't really know anything about being self employed.

Today she got a letter from LCS which is a debt collecting company saying that she has a debt of £1300. I assume that it's 2 year penalty for not doing self assessment. I'm guessing as we never receive any letter,any warning letter or any penelty (which should be £100 on beginning). It may be caused by us moving 3 times in 2 years.

Does anyone have any idea what would be next step? After contacting HMRC. Or should I appeal through a form form HMRC website...? But I don't have any details other than case number from LCS letter. I already red on the internet that I shouldn't be dealing with LCS at all.

Another thing,I don't know if it's important, the letter was to my wife's maiden surname, not the one she has now.

I know it's our mistake, I'm not saying it isn't our fault, but would like to resolve it any other way than paying £1300.


ps. I hope this is the right section of the forum

TheCyclingProgrammer

You can't be fined for failing to submit a tax return unless you've received notices to file a return and ignored them.

You can be fined for failing to notify HMRC if you're chargeable to tax or NIC. It's technically true you don't have to notify HMRC if you don't have any tax to pay but if she was self employed she would have likely owed NIC. Failure to notify penalties are related to the amount of tax owed, not a fixed amount.

If your wife registered as self employed as you say then it's almost certain you would have received a notice to file a tax return so regardless of whether you owed tax you should have filed one.

If as you say you've moved house and not updated HMRC with your new address then it's likely all letters have gone to the wrong address. This is not HMRCs fault.

You can appeal but there isn't really any reasonable excuse. You (probably) received a notice to file a return. If you believed you shouldn't have to file one you should have contacted HMRC but you didn't, you ignored it. You then failed to notify HMRC of your new address.

I'd say the best you can hope for is to agree a payment plan to pay off the penalties.

MrYoungg

Thanks for your reply.

We didn't have any letter,any warning letters at all. If we would I wouldn't wait for this to become £1300 case. It's probably down to us moving as well as our last address was a new build and there was always problem with Royal Mail. So here we are, we were just informed today about that.

TheCyclingProgrammer

MrYoungg wrote: »

Thanks for your reply.

We didn't have any letter,any warning letters at all. If we would I wouldn't wait for this to become £1300 case. It's probably down to us moving as well as our last address was a new build and there was always problem with Royal Mail. So here we are, we were just informed today about that.

But if you'd kept HMRC updated with your new address then you probably would have received the warning letters before it even reached the stage you're at now. Ultimately it's you're responsibility to do this.

I'm sorry you've been left with a fine, it does seem disproportionate if you didn't actually owe any tax but the fine is there to ensure people submit their returns on time.

MrYoungg

We forgot about that as she was employed by 2 different companies later so all taxes etc was done by them. I'm not saying it's not our fault, just looking for what steps should I take now.

TheCyclingProgrammer

MrYoungg wrote: »

We forgot about that as she was employed by 2 different companies later so all taxes etc was done by them. I'm not saying it's not our fault, just looking for what steps should I take now.

Speak to HMRC but if it's been passed onto debt collectors I'm not sure if you'll have many options.

uknick

Mr Youngg

How did the LCS letter get to you?

MrYoungg

uknick,

We got letter yesterday,it was send to our current address.

Mr.Generous

If you had filed in year 1 you probably would have got a refund from tax paid earlier, I got £5k back in year one of being self employed. I would definitely contact tax man, they have started being helpful last couple of years. My sister missed a deadline and didn't get fined, she just made excuses.

Pennywise

Mr.Generous wrote: »

If you had filed in year 1 you probably would have got a refund from tax paid earlier, I got £5k back in year one of being self employed. I would definitely contact tax man, they have started being helpful last couple of years. My sister missed a deadline and didn't get fined, she just made excuses.

You only get a tax refund if you've actually paid some tax - far from universal that everyone gets a refund in the first year - most don't. In your case, you were either employed and therefore paid tax on wages before your s/e, or you had tax deducted from your earnings via the CIS scheme - neither appear to be the case here.

No harm in contacting HMRC, explaining the situation and hoping they are sympathetic, but there's no guarantee, and the longer it's been left, the less sympathetic they are.

uknick

MrYoungg wrote: »

uknick,

We got letter yesterday,it was send to our current address.

I understood that; I was wondering how the letter got to you if you'd never told HMRC you'd moved.