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  • FIRST POST
    • LBBL5725
    • By LBBL5725 4th Jan 18, 10:13 AM
    • 2Posts
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    LBBL5725
    HMRC penalty issue
    • #1
    • 4th Jan 18, 10:13 AM
    HMRC penalty issue 4th Jan 18 at 10:13 AM
    Hello,

    I have an issue with HMRC about a penalty they are issuing me with and hope someone can give me some advice as I am stressing myself out sick with this.

    I moved house at the end of Oct and had my mail redirected with a few days overlap from my previous address which I moved into in March 2014.

    In my redirected mail on the 17th Nov I received a letter dated 14th Nov from HMRC saying I owed a 400 penalty for missed self-assessment in 14/15 and 15/16 and that they had recently contacted me about this. I thought this letter was fake as I have always been a PAYE tax payer and have never had a letter from HMRC saying that I have a UTR or needed to self-assess.
    I rang them up and they said that they had sent me letters saying that and that I needed to do self-assessment tax returns for those years and then I can appeal the penalties. I said I had never received them as the address on the letter I did receive on the 14th had the wrong previous address for me on it, similar but incorrect. My rented flat was Flat 38 Alpha Court, 5 Berry Avenue, city, postcode and they had been sending all correspondence to me to 38 Berry Avenue which is a house on the other end of the street. I believe the letter I did receive I only got because the Royal Mail redirection system picked up on my name, the door number, the road name and postcode. Addresses changed.
    Even if they had sent letters to my address previous to the Flat 38 one, that was my parents house where they lived for 6 more months after I moved out and then had redelivery of mail for 2 years with all our names so it didn't get sent there.

    The person I spoke to actually directed me to the wrong form and the wrong way to do it so I then had to ring up again, get directed on how to register to do a tax return online and then wait for a letter with the code on it so by the time I filed it it was the 30th December.
    After I filed my returns I composed a thorough appeal letter on the basis that they had been sending letters to the incorrect address, backed up with council tax bills, utility statements, P45s from my previous two employers where I worked during the years to be filed and a driving licence all showing that my address was different to what they had been sending it to. I also included a copy of the letter I did receive which shows the address is different.
    I got a message from them today stating that I owe in the region of 400 in owed tax, not sure how they managed that on a PAYE tax code, but also that I owe 1620 in late penalty payments because of the date I filed it.

    I sent the appeal letter on next day delivery on the 2nd Jan so I appreciate it will take time to process but I am unsure whether to pay the fine before the 31st if it has not been addressed yet or to wait and see what the appeal says. I will struggle to pay the amount as it is combined with the overdue tax so I really can't afford to have any interest added but I am worried that they won't care about my appeal and waive/discount the penalty and make me pay anyway. What do you think I should do?

    Thank you
Page 1
    • dori2o
    • By dori2o 4th Jan 18, 10:25 PM
    • 7,597 Posts
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    dori2o
    • #2
    • 4th Jan 18, 10:25 PM
    • #2
    • 4th Jan 18, 10:25 PM
    You mention that you changed addres and that the letters had gone to an incorrect address.

    IME if you had genuinely not received the notice to file a tax return then HMRC will likely agree the appeal and cancel the penalty.

    When you changed addres, did you notify HMRC directly that you had moved.?

    Its actually amazing the number of people who honestly believe they dont have to tell HMRC of a change of address, believing that the local council, or their employer, or the magic crystal ball on a HMRC employees desk will do this for them.

    Just to be clear, just as you (not the OP in particular but 'you' meaning everyone) would tell the GP, the local library, energy provider, council that you have changed address/name/sex etc etc you are responsible for telling HMRC of this change.

    Address changes can be notified online via the gov. Uk website, or via the Personal Tax Account, by telephone or by letter.

    Secondly, you mention 31 January as the payment date, but this only applies to the 2016/17 tax return. The 2015 and 2016 returns due date for payment will have already passed.

    The due date is set at 3 months and 7 days from the date the notice to file was issued in cases where tax returns are issued late/after the original standard filing dates.

    This means that any tax due for 2015 and 2016 is due now.

    Assuming your appeal is accepted then the payment date for these years will be changed to the date you actually submitted the forms.

    This means that interest will be accruing on the amounts due for 2015 and 2016.

    My advice is to pay the tax owed for these years asap. You could hold off on paying the penalty until you receive the appeal decision.

    However, if the appeal is refused, you would need to pay the interest due on this also.
    To equate judgement and wisdom with occupation is at best . . . insulting.
    • laticsforlife
    • By laticsforlife 5th Jan 18, 1:30 PM
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    laticsforlife
    • #3
    • 5th Jan 18, 1:30 PM
    • #3
    • 5th Jan 18, 1:30 PM
    dori2o

    you ask did the OP notify HMRC of the change of address?

    I'd say that the sure answer to this is no because they were only on PAYE and not on SA so had no need to notify a change of address.

    The more important question is why are they now on SA at all, what prompted the requirement to notify chargeability. the OP doesn't say WHY they are now on SA, and now why they owe 400 plus all these penalties. if there were no liability of course there'd be no penalty position.

    OP says "not sure how they managed that on a PAYE tax code" - well if you give us some more details about what it was you put on the return, we can advise whether the charge is correct. Do you earn over 50,000 and receive Child Benefit for example? that could be the reason for a bill.

    As for the penalties, I think i would be tempted to take it to Tax Tribunal (which isn't that daunting, as the Chairperson will be helpful in taking you through the process, you don't need to be professionally represented).

    That's all assuming they don't cancel the penalties, as you have good reason for not responding sooner, and as soon as you did realise, you put it right.
    I didn't do it, nobody saw me do it, you can't prove a thing!
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    • laticsforlife
    • By laticsforlife 5th Jan 18, 1:35 PM
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    laticsforlife
    • #4
    • 5th Jan 18, 1:35 PM
    • #4
    • 5th Jan 18, 1:35 PM
    I sent the appeal letter on next day delivery on the 2nd Jan so I appreciate it will take time to process
    Originally posted by LBBL5725
    Just spotted this line - oh dear, that's going to take forever.

    You'd think Next Day delivery would mean it will be dealt with quicker - wrong!

    I am reliably informed the current backlog of Recorded Delivery/Special delivery is about 4 weeks, quite disgusting I know.

    Had you sent it by normal mail it'd probably be being dealt with , but 'special' post gets dealt with whats called an exceptions team within the post-in system, and they are massively understaffed - normal post just gets scanned so doesn't require much human intervention, crazy I know.
    I didn't do it, nobody saw me do it, you can't prove a thing!
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    • dori2o
    • By dori2o 6th Jan 18, 2:12 PM
    • 7,597 Posts
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    dori2o
    • #5
    • 6th Jan 18, 2:12 PM
    • #5
    • 6th Jan 18, 2:12 PM
    dori2o

    you ask did the OP notify HMRC of the change of address?

    I'd say that the sure answer to this is no because they were only on PAYE and not on SA so had no need to notify a change of address.

    The more important question is why are they now on SA at all, what prompted the requirement to notify chargeability. the OP doesn't say WHY they are now on SA, and now why they owe 400 plus all these penalties. if there were no liability of course there'd be no penalty position.

    OP says "not sure how they managed that on a PAYE tax code" - well if you give us some more details about what it was you put on the return, we can advise whether the charge is correct. Do you earn over 50,000 and receive Child Benefit for example? that could be the reason for a bill.

    As for the penalties, I think i would be tempted to take it to Tax Tribunal (which isn't that daunting, as the Chairperson will be helpful in taking you through the process, you don't need to be professionally represented).

    That's all assuming they don't cancel the penalties, as you have good reason for not responding sooner, and as soon as you did realise, you put it right.
    Originally posted by laticsforlife
    Of course they had a requirement to tell HMRC of a change of address. How else do you suppose HMRC get this information?

    It is EVERY taxpayers responsibility, no matter what form of tax process they fall into to advise of changes, including address.

    This is very likely the reason they now have penalties to pay.

    In this instance, and from the details given, this is the likely timeline.

    Hmrc produce a tax calculation via PAYE and send it to OP stating that he owes tax for either 2015, 2016, or both. This is sent to the address held on the OPs record. These are informal assessments.

    2 weeks later OP has not responded, either to object to the calc or to make a voluntary payment of the debt. A letter (VPL1) is sent to the OP to the address on his record.

    A further 12 weeks later and still no response from the OP. A further letter (VPL2) is issued.

    A further 12 weeks pass with no correspondence from OP. This is now 6 months after the assessment was issued. (due to the fact these letter are going to an old address as the OP has not updated HMRC)

    As prior to the 2016/17 tax year PAYE underpayments could not be lawfully enforced, HMRC cancels the assessments done for 14/15 and 15/16, opens a self assessment record, then issues a notice to file to the OP, to the address they have on record. This is done because tax calculated under self assessment can be lawfully enforced.

    3 months and 7 days pass. No tax return completed. The due date has now passed, HMRC issues penalty notices.

    All of this because an address is incorrect.

    HMRC do not as a rule accept notification of address change from 3rd parties, including employers. They may use the information if they have to try and trace a taxpayer after receiving a piece of undelivered post back.

    They dont accept 3rd party info for a very good reason, the information may not be accurate. The taxpayer may give a different address to their employer to the one they live at, for instance if they work away from home they may give the details of the digs they are temporarily staying in to their employer.

    It is absolutely amazing the number of people who simply do not tell HMRC when they move home.
    Last edited by dori2o; 06-01-2018 at 2:25 PM.
    To equate judgement and wisdom with occupation is at best . . . insulting.
    • dori2o
    • By dori2o 6th Jan 18, 2:19 PM
    • 7,597 Posts
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    dori2o
    • #6
    • 6th Jan 18, 2:19 PM
    • #6
    • 6th Jan 18, 2:19 PM
    Just spotted this line - oh dear, that's going to take forever.

    You'd think Next Day delivery would mean it will be dealt with quicker - wrong!

    I am reliably informed the current backlog of Recorded Delivery/Special delivery is about 4 weeks, quite disgusting I know.

    Had you sent it by normal mail it'd probably be being dealt with , but 'special' post gets dealt with whats called an exceptions team within the post-in system, and they are massively understaffed - normal post just gets scanned so doesn't require much human intervention, crazy I know.
    Originally posted by laticsforlife
    This is no longer the case.

    All post now goes to a central office where it is scanned. The scaner searches for key words, phrases and where necessary barcodes and form numbers to work out which post queue it should be put into. That scan is then loaded onto a server and is viewed by the staff dealing with that type of work. Any personal documents/attachments are then returned to the taxpayer.

    Even recorded delivery post sent to a specific office is no longer opened in that office, it is signed for en-masse and then redirected to the central office to be scanned.

    Gone are the cabinets in offices whick hold box after box of customer correspondence, its now all held electronically.
    To equate judgement and wisdom with occupation is at best . . . insulting.
    • Pennywise
    • By Pennywise 6th Jan 18, 7:01 PM
    • 10,201 Posts
    • 18,976 Thanks
    Pennywise
    • #7
    • 6th Jan 18, 7:01 PM
    • #7
    • 6th Jan 18, 7:01 PM
    All post now goes to a central office where it is scanned. The scaner searches for key words, phrases and where necessary barcodes and form numbers to work out which post queue it should be put into. That scan is then loaded onto a server and is viewed by the staff dealing with that type of work. Any personal documents/attachments are then returned to the taxpayer.
    Originally posted by dori2o
    Maybe in theory, not in practice - still VERY hit and miss.
    • laticsforlife
    • By laticsforlife 8th Jan 18, 2:47 PM
    • 1,203 Posts
    • 1,473 Thanks
    laticsforlife
    • #8
    • 8th Jan 18, 2:47 PM
    • #8
    • 8th Jan 18, 2:47 PM
    This is no longer the case.

    All post now goes to a central office where it is scanned. The scaner searches for key words, phrases and where necessary barcodes and form numbers to work out which post queue it should be put into. That scan is then loaded onto a server and is viewed by the staff dealing with that type of work. Any personal documents/attachments are then returned to the taxpayer.

    Even recorded delivery post sent to a specific office is no longer opened in that office, it is signed for en-masse and then redirected to the central office to be scanned.

    Gone are the cabinets in offices whick hold box after box of customer correspondence, its now all held electronically.
    Originally posted by dori2o
    You pretty much just further expanded on what I said happens now??

    I didn't say post goes to a 'local' office - it all goes to a PO Box address which has recently changed from Bootle to somewhere else. That change has caused delays in the scanning process.

    And after 50 days (down from 90 days) documents ARE destroyed, they are NOT returned as a matter of course unless specifically requested.

    And Recorded Del/Special Delivery/FaxesARE dealt with by an Exceptions Handling Team, who DO have a 4 week delay (as of right now).
    I didn't do it, nobody saw me do it, you can't prove a thing!
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