Tax Penalties for 19/20 - Applied despite earlier agreement Self Assessment not required

mark55man

Hello.  in 2016/2017  my OH used the Govt Gateway SA portal to request not to submit self assessments after she had stopped being self employed and become PAYE employed.  She got confirmation she did not need to submit any returns unless her employment circumstances changed or HMRC received them.

So she didn't change her job, although she did stop work in April 2019 with one pay packet in Tax Year 2019/20.  We didn't do a tax return for her and didn't expect to do one this year.  However she got a letter just before Christmas 2021 saying her tax affairs were late and when she logged on to Government Gateway, she had a notice of late filing for 19/20 in Feb 21 and then a notice in Aug 21 saying the maximum penalty £1200 was being required.  The physical letter was sent after the appeal period had expired.  No other letter had been sent before regarding penalties etc in the early part of 2021 (ie when the 19/20 return was due).  

Although this is her responsibility, it may be old fashioned, but I have looked after making the submissions with her pressing the submit button, so I feel this is really up to me to find out the best resolution.  Simply not logging on feels like an excuse that won't carry any weight, although for a total salary well under the Personal Allowance a £1200 fine seems a bit steep, and we thought we had put the SA's to bed,.

We will call on Tuesday to start getting to the bottom of this.  I am away on Monday or it would be done then.  But any advice on how to reduce or avoid the fine greatly welcomed.  I suspect I may have to suck this one up, (paying the money will be unwelcome but within Emergency Funds) but just appealing to those more expert (clearly) than I, as to whether any of the following are mitigations
* the low level of her income, as in why are they asking for an SA when even her PAYE part time role was under the personal allowance
* the fact that £0 tax was due (in fact HMRC owe her £100 quid or so)
* the absence of any interim written correspondence 
* the fact she has been (with my support) a leading figure (and recognised as such) in the charitable responses to the Pandemic in our community (and hence our focus was elsewhere)

Thanks in advance for any assistance, and I know I deserve "how could you be so dumb" responses, but if we could avoid too much of that as I am already beating myself up!!

PS we have now done the return, although not quite clear if should submit now or wait for the conversation

[Deleted User]

Thanks in advance for any assistance, and I know I deserve "how could you be so dumb" responses, but if we could avoid too much of that as I am already beating myself up!

That’s seriously harsh on yourself.

Was a notice to file issued for 2019/20 in which case the return should have been submitted?

Does she have the confirmation from HMRC that no returns are further required which would obviously be pretty good grounds for appeal?

mark55man

Thank you.  She had a notice saying you don't have to provide a SA unless your circumstances change or we ask for it.  Also she passed the on line do you need to submit an SA quiz qwith a clear answer no

To be clear there was a HMRC message asking for it to be filed, but we had assumed that as circumstances had not changed and were under the PA with no other tax complications that it was not required (which is why I am going down the dumb route!! as a check wouldn't have taken 10 minutes)

[Deleted User]

I would appeal anyway. The fact that you admit that there was a Notice to File’ is problematic as this overrides everything else that had gone before - the online quiz is meaningless. 

See what transpires - I wouldn’t accept defeat just yet!

mark55man

Yes, the realistic part of me is saying "notice served", "deadlines missed", "appeal window closed" - not a hope.  But it just seems so unreasonable to be asking for SA so will see what a little conversation can achieve

sheramber

Your wife will need to give her permission for HMRC to speak to you, unless she has already done so. 

If not, she will have to start the call, can go through the security questions then tell them she wishes you to continue the call.

mark55man

Thank you.  We will do that - she will start the call and introduce me I think is best.

Separately I found this - https://taxaid.org.uk/guides/taxpayers/tax-returns/late-tax-returns

Which says I can ask for the tax return to be withdrawn up to April 2022 and if agreed, this means that any penalties issued for missing the tax return filing deadline will be set aside.  The link suggests "all your income is taxed under PAYE", will do as a reason 

mark55man

Just to provide a happy ending.  I appealed on the grounds suggested in my last post, and (8 weeks later) received confirmation that they had accepted  the reason ("I've accepted your appeal under Section 54 Taxes Management Act 1970 and I've cancelled the penalties")  so that's £1200 I don't have to pay, which would have been a hefty reward/punishment for an atypical inattention 
.

[Deleted User]

mark55man said:

Just to provide a happy ending.  I appealed on the grounds suggested in my last post, and (8 weeks later) received confirmation that they had accepted  the reason ("I've accepted your appeal under Section 54 Taxes Management Act 1970 and I've cancelled the penalties")  so that's £1200 I don't have to pay, which would have been a hefty reward/punishment for an atypical inattention 
.

Excellent