Newsletter Spring 2018

HMRC is not always right

It should be reasonable to assume that information published in the name of HMRC on gov.uk would be 100% accurate, but unfortunately it is not.

For example, HMRC asserts that every company director must register for self assessment and complete a self assessment tax return for each year they hold the directorship. This is incorrect. A person only has to register for self assessment if he or she has income or gains to report to HMRC. There is no special condition set down in the tax law which requires directors to register for self assessment, where they have no income which is not already taxed under PAYE.

If you have been issued with a self assessment tax return, or a notice to complete the return online, but you think it’s unnecessary as you have no untaxed income to report, you should ask HMRC to withdraw the requirement to file that tax return. If you ignore the return or notice, you will receive a £100 penalty for late submission of the tax return, plus daily penalties of up to £900, and further penalties of £300 where the delay amounts to six months or twelve months. These penalties can be appealed at the tax tribunal.

Where an HMRC officer has made a decision you think is wrong, you can generally ask for that decision to be reviewed by a different HMRC officer, under what is known as internal review. This will take up to 45 days, and you can submit additional evidence to the review team to help them with their decision. Certain decisions are not open to review.

If you are not happy with the results of the review you can submit an appeal to the tax tribunal. Where the issue is complex you may want to ask for Alternative Dispute Resolution (ADR), which is a type of mediation. The appeal process can run alongside ADR, until such time as ADR concludes. We can help you with all these appeal processes.