With the introduction of a new automatic PAYE penalty system being introduced in October 2014 it is it time to consider the cost of the penalty system to British business? You decide. 49% of the 17,200 automatic VAT late filing penalties issued by HMRC in 2013 were overturned on re review. In 2011/12 HMRC cancelled penalties in 60% of cases.
SME Tax News
In Francois Berrier v HMRC [2014] TC03584 a taxpayer not only suffered tax penalties for omitting income from his return, he was ordered to pay HMRC's tribunal costs. He or his adviser withheld evidence and mislead the tribunal.
HMRC's definition of 'reasonable excuse' makes for a waste of time and resources: it is "too narrow" according to First Tier Tribunal Judge Ann Redston. As a result cases come to the Tribunal when they could be resolved by HMRC.
HMRC has reduced the number of PAYE penalty notices that it is sending employers in respect of year end returns. This is because of the impact of Real Time Information (RTI) filing and penalties.
- If you have not filed your 2013/14 Full Payment Submission and/or Employer Payment Summary, or if filing on paper your P35 and P14 returns, HMRC will send a reminder shortly, and a penalty notice in September if no filing or return is made by that date. No further penalty notices will be issued until the return is received.
- If you have not filed an employers' end of year returns (P35 and P14) for 2012/13 you will have been sent penalty notices in September 2013 and January 2014. You will not be sent further notices until you file your return.
Links: HMRC penalties
The government department, Business Innovation & Skills (BIS) has published a response to a consultation document relating to greater transparency and trust in UK business and included a proposal to prohibit corporate membership of LLPs.
In Robert Morgan v HMRC and Keith Donaldson TC02720 two taxpayers had their daily £10 late filing penalties quashed by the First Tier Tribunal (FTT). HMRC went on to make a successful appeal to the Upper Tribunal and then the taxpayer lodged an appeal to the Court of Appeal.
The case of Graham Michael Wildin v HMRC [2014] TC03586, involved a dispute on the correct method for valuing goodwill in an accountancy practice. HMRC favoured an assets-basis and the accountant, the appellant, a multiple of Gross Recurring Fees (GRF).
May 2014: update on recent developments in land and property taxation. This is available to subscribers only.
In Averil Finn & Gregory Finn & Robin Morris & Andrew Cornish v Revenue & Customs [2014] TC03555, a group of Enterprise Investment scheme (EIS) investors lost their relief when their company was acquired by another company.
In M J Febrey v Revenue & Customs [2014] TC03530 a director was made personal liable for tax and NICs following a deliberate failure to deduct PAYE and NICs.