pension lump sum & tax

kaylalcfc

I'm cashing in my private pension of 36k on Ill health grounds I've received my quote from aviva today they are using emergency tax code & taking nearly 11k off my lump sum payment 😮 they have advised I can claim some back off hmrc but I owe the hmrc 6k from 2008_2009 when I ceased self employment to care for my wife after she lost our daughter at birth she suffered with a severe mental breakdown 😢 I then informed hmrc I wasn't working anymore but they carried on sending tax return forms for 2 years even though I told them I was not working & kept charging me late fees anyway im wondering if I can appeal or is it to late? I'm also worried I cannot have a refund due to me owing them this bill? Thanks andy

xylophone

I then informed hmrc I wasn't working anymore but they carried on sending tax return forms for 2 years even though I told them I was not working & kept charging me late fees anyway im wondering if I can appeal or is it to late?

If the forms were sent then you should have completed them showing nil employment income.

However, see post 6 http://forums.moneysavingexpert.com/showthread.phpp=72940115#post72940115

Have you also looked at post 2 in the same thread?

And post 5 here https://forums.moneysavingexpert.com/discussion/comment/72940940#Comment_72940940

jamesd

HMRC's decision to charge penalties has been overruled on appeal. You may get the penalty part reduced or eliminated. See these examples:

1. McDonald v Commissioners for HMR&C [2017] UKFTT 0265 (TC): "the taxpayer had gone through a prolonged period of difficulty which was traumatic for her. It involved her running her own self-employed business, looking after her own home, looking after her ailing parents and their home, attending to her parents' personal needs and, for a time, driving her father to visit her mother in various hospitals twice a day. This would have been physically and mentally exhausting for her. She then suffered the loss of her parents in April and September 2010. After their deaths she had had to deal with their personal effects and financial affairs."
2. Hindocha v HMR&C [2017] UKFTT 0373 (TC) and Zainub Takeaway v HMR&C [2017] UKFTT 0337 (TC)

While not filing a tax return at all means some sort of penalty is likely you might be able to get the level greatly reduced because of your circumstances.

Normal HMRC penalties are based on a percentage of the tax owed, so if no tax was owed, there would normally be a nil penalty amount. Penalties for not making a tax return at all aren't necessarily calculated in the same way but at the time of your troubles I think that there was a limit based on tax owed for those as well.

Essentially, you might find that you actually owe HMRC nothing. The tax saving board here has people who are more expert on this than me, best to ask there and point to this post for a bit more background about why you're asking.