(Incorrect?) self assessment filing penalty

aroominyork

In January this year my wife wanted to claim higher rate relief linked to 2021-22 SIPP contributions. In past years she has done this by sending a letter to HMRC but the delay in processing these is now so long that she decided to complete a self assessment (she does not meet the criteria for obligatory self assessment). The registration section of Gateway said the deadline for registering was October last year but it accepted her registration anyway. By the last week of January no UTR had arrived in the post so she sent a letter to HMRC claiming the relief; this shows on Gateway as received 26 January and "in progress".

Earlier this month she received a £100 late filing penalty for not filing her 2021-22 self assessment on time. She appealed online explaining the above, but today received a letter saying they cannot consider her appeal until she files. What should she do? File and then appeal again, and if so should she pay the fine by the 8 June deadline and then hope it is refunded?

Dazed_and_C0nfused

There really is no deadline like that for registering for Self Assessment, I think you're getting mixed up with the failure to notify deadline.  Which doesn't seem relevant here.

I'm not sure what relevance the last week of January has here.

As she had registered for Self Assessment why did she then write in separately 🤔

Realistically she has two options.

1.  File the return and proceed with the appeal (not sure what grounds there would be from what you've posted).

2.  Ask HMRC to withdraw the return.

Option 1 has the advantage of resolving the higher rate tax relief element.

Option 2 solves the penalty issue but leaves the higher rate relief to be resolved at a later date.

Out of interest as she made previous claims couldn't this have been done by simply phoning HMRC at 8am one morning?

Also, what was the tax code on her 2021-22 P60?

aroominyork

Last week of January was relevant because without UTR she could not file self assessment. Hence she wrote in. (Was not aware you could just phone rather than put something in writing.) P60 tax code 1257L.

Doesn't she have cause for appeal that she was not required to file; she did not receive UTR; she claimed the refund before 31 January? 

Dazed_and_C0nfused

aroominyork said:

Last week of January was relevant because without UTR she could not file self assessment. Hence she wrote in. (Was not aware you could just phone rather than put something in writing.) P60 tax code 1257L.

I still don't get why January was relevant?

Are you under the (mistaken) impression that someone who hasn't been issued with a tax return (or notice to file a return) can be charged a penalty for late submission of something that they've not been asked to submit?

Doesn't she have cause for appeal that she was not required to file; she did not receive UTR; she claimed the refund before 31 January?

Well she certainly knows how to make life complicated!

I don't really understand your grounds for appeal.  As soon as a return or notice to file one was issued then she was required to complete one.  This was at her own request.  A return/notice to file cannot be issued without a UTR so at some point she has been allocated one and a return or notice to file issued. 

Don't know what claiming the pension relief before 31 January has to do with it?  That's a bit like saying someone who is self employed and registers before 31 January would be exempt from penalties even if they take no action to file a return.

Only your wife can decide the best course of action but asking for the return to be withdrawn might be the more prudent option here.

Assuming she isn't desperate for the higher rate tax relief.  Is she expecting a large refund?  

One thing to bear in mind is that with her registering for Self Assessment her letter claiming relief has probably been filed away as needing no action as the tax return would mean HMRC wouldn't be reviewing that tax year anymore.

NB.  Tax code 1257L indicates she hasn't received any provisional relief, a factor sometimes overlooked when previous claims have been made.

aroominyork

Dazed_and_C0nfused said:

Only your wife can decide the best course of action but asking for the return to be withdrawn might be the more prudent option here.

I phoned HMRC and they removed the penalty. The system seemed to have set up two UTRs so that has now been straightened out. Thanks for the advice.