5% Surcharge?

hedger

Hi I am in a dilemna with HMRC over a 5% surcharge. I was re-mortgaging my house to pay my tax liability by Jan 31st 08. Of course there just had to be a world credit crunch and this took longer to sort out than thought (a mortgage company I was goin with withdrew my offer). I informed HMRC that I would have trouble paying by end of Feb but only by a very short time. they agreed a payment plan with me that the full amount + interest had to be paid by 21st March - I have a letter from them to that effect. I paid the full amount on 18th March.
Now a letter has arrived stating a 5% surcharge must be paid cos I missed the Jan deadline!! The reasons for the surcharge being waived are basically you have died or your loved one has died. It is a substantial amount too :mad:
anyone any experience in surcharges?

BoGoF

It depends when you arranged your time to pay agreement, if it was before the surcharge trigger date of 28/2/08 then you should not have a surcharge imposed. If it was not I can't see that you have a case to appeal - it is made very clear that if tax is not paid by 28/2/08 then a surcharge will be imposed.

Not having the funds to pay is not normally a 'reasonable excuse' in they eyes of HMRC but you can still appeal if you want - ultimately it is the appeal commisioners decision.

hedger

BoGoF wrote: »

It depends when you arranged your time to pay agreement, if it was before the surcharge trigger date of 28/2/08 then you should not have a surcharge imposed. If it was not I can't see that you have a case to appeal - it is made very clear that if tax is not paid by 28/2/08 then a surcharge will be imposed.

Not having the funds to pay is not normally a 'reasonable excuse' in they eyes of HMRC but you can still appeal if you want - ultimately it is the appeal commisioners decision.

Thats my point BoGoF. I arranged the payment plan in early February (as soon as I knew I would miss the 28/02/08 cut-off date and I honoured the agreed date. I specifcally asked on the phone when I arranged the payment plan would the surcharge be applied if I paid by 21st March and the girl said no. I have asked the HMRC to retrieve the telecon as they are supposed to record all calls. I have also lodged an appeal. I think it is scandalous what these people can do :mad:

Mikeyorks

hedger wrote: »

I arranged the payment plan in early February

You don't have a problem then. The confirmatory letter you received is, of itself, sufficient evidence there was a payment plan in place prior to the Surcharge trigger date? Someone at HMRC hasn't set the arrangement dates up properly, as it is that which neutralises the issue of the additional charge.
The basics here :-

http://www.hmrc.gov.uk/manuals/sam/jumps/jump00313.htm

hedger

Mikeyorks wrote: »

You don't have a problem then. The confirmatory letter you received is, of itself, sufficient evidence there was a payment plan in place prior to the Surcharge trigger date? Someone at HMRC hasn't set the arrangement dates up properly, as it is that which neutralises the issue of the additional charge.
The basics here :-

http://www.hmrc.gov.uk/manuals/sam/jumps/jump00313.htm

Many thanks for this Mike - I am gonna follow this up today.

hedger

Bad news for me. HMRC contacted me (the most arrogant f*£$er in their office) and said they are considering my letter as an appeal against the surcharge. as far as they are concerned cos I didnt make payment by 31st January the surcharge is applicable. they say it is 28 days from the due date that all money must be paid. I am gonna fight this all the way cos I was told different and I agreed different. Their telephone conversations and payment plan letter to me on 26th feb did not mention 5% surcharge and states clearly my payment date was 21st March. They are gonna check phonecalls and investigate. they advise that I pay the surcharge on the due date of 18th April but I havent got the money.
I am fuming here......:mad: :mad:

Mikeyorks

Which office are you dealing with? If you made the arrangement through the Payment Helpline (it's now based in Cumbernauld and specialises in SA 'time to pay' cases) .... they're generally pretty good. But less good are some of the local debt collection offices ... where a feeling still seems to persist 10 years on, that people who pay late should be subject to the 5% surcharge as well as the daily interest. This despite their own instructions are clearly to the contrary.

The letter you had should have specified the arrangement made .. and should have included interest to that date? It could not have included the Surcharge ..... because that is inappropriate for a deal struck prior to 28th Feb 08!

But you do need to d/w this very cooly! So I trust your appeal was well considered and set out the facts. If what you have posted on here is 100% correct ... then you can see from their own instructions that you are in the clear? So just pursue it calmly ... and do not pay the Surcharge. As they have written to you confirming the arrangement / date ..... they have little option but to pull it.

If the appeal goes to the Commissioners ..... they will wipe the floor with them!

Bit more data here on the internal procedures / considerations :-

http://www.hmrc.gov.uk/manuals/sam/sampay/sampay04105.htm

chappers

The problem with the debt collection offices are that half of the staff don't know how the tax system works.
A couple of years ago I had a dispute with HMRC(which incidently I lost).
Some woman turned up at my door whilst I was out and left a note, I duly phoned her back and started explaining the situation, she cut me short saying it's no good i don't know anything about tax, anyway I finally lost my dispute and my accountant mitigated on my behalf and they reduced the amount thay said I owed them.I paid the amount and would you believe it 5 days later the same woman turns up at my door saying she has come to collect the original amount. i told her i had already paid and that it was adifferent amount to the one she had.
she virtually accused me of being a liar, saying a) the amount hadn't been changed and b)that I hadn't even paid the amount I said as she had checked the system before leaving the office that morning.She strated ranting on about distraining my property etc
So on my doorstep I ring my accountant whilst she rings her office, halfway through my conversation with my accountant I hear her say oh how could that of happened and how come the amount is different. she didn't even wait for me to finish my conversation but just scuttled off back to her car.I followed her over and tapped on her window i said to her I take it thats all settled then, she mumbled something along the lines of blah blah blah computer system blah blah blah glitch blah blah blah bloody milton keynes and just drove off.

hedger

Mikeyorks wrote: »

Which office are you dealing with? If you made the arrangement through the Payment Helpline (it's now based in Cumbernauld and specialises in SA 'time to pay' cases) .... they're generally pretty good. But less good are some of the local debt collection offices ... where a feeling still seems to persist 10 years on, that people who pay late should be subject to the 5% surcharge as well as the daily interest. This despite their own instructions are clearly to the contrary.

The letter you had should have specified the arrangement made .. and should have included interest to that date? It could not have included the Surcharge ..... because that is inappropriate for a deal struck prior to 28th Feb 08!

But you do need to d/w this very cooly! So I trust your appeal was well considered and set out the facts. If what you have posted on here is 100% correct ... then you can see from their own instructions that you are in the clear? So just pursue it calmly ... and do not pay the Surcharge. As they have written to you confirming the arrangement / date ..... they have little option but to pull it.

If the appeal goes to the Commissioners ..... they will wipe the floor with them!

Bit more data here on the internal procedures / considerations :-

http://www.hmrc.gov.uk/manuals/sam/sampay/sampay04105.htm

Mike first of all many thanks for your advice - it has been very useful and I wouldve been lost without it.

I am dealing with the Belfast Office (cretins) but have had letters from Cumbernauld (the payment plan letter was from here) and west Yorkshire. This is what is so confusing and frustrating - one office is telling me completely different stories to the other.
I have phoned Cumbernauld this morning and guess what, their systems are down til monday or tuesday but I asked the manager the simple question - if I paid the agreed plan in full as per their letter they sent can a surcharge be applied? She answered no it cant. I will be paying no surcharge