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Oh no! I've got a tax penalty...

A new Mum enlisted our help over the summer when she realised that she had inadvertently missed the self-assessment deadline. Our client, let’s call her Helen*, became extremely distressed after she received a letter from HMRC informing her that due to non-submission of her 2015-16 tax return she owed £900 in penalties and this amount was still growing. Helen at first tried to resolve the matter by herself but became increasing frustrated and anxious when she was unable to get the help and support she needed from HMRC.

Helen asked for recommendations for a local approachable accountant and was referred to us. As Helen had a baby who was only a few weeks old, we arranged for a time when she thought it would be easiest for us to visit her at home. We had an initial chat over a cup of tea where we quickly understood how the situation had arisen; Helen had been self-employed as a Nanny for a small portion of the tax year and then found out that she pregnant. As a result of an extremely difficult pregnancy where she was too ill to work, Helen missed the 31st January deadline to submit her self-assessment.

As soon as she realised this in June, she contacted HMRC to explain the situation - they advised her not to worry as they would suspend all penalties and said she could submit the return once the baby was born. Unfortunately for Helen, this advice was incorrect and the penalties were growing at £10 each day. She didn’t realise this until the start of August by which point the penalties had reached £1,300 – a huge amount for a young family to have to outlay.

What we did

We met Helen in mid-August and advised her that her priority was to get the tax return submitted ASAP. We reassured her that she had a strong case for appeal and that we would address getting the penalties revoked as soon as we had filed the tax return.

We guided Helen through what information she needed to provide for us to complete the self-assessment. We did this quickly and efficiently and managed to get all information to HMRC before the end of the month. Once the tax return was submitted, we drafted an appeal letter to HMRC outlining all of the facts. We explained that Helen should not have to pay any penalties as she had a reasonable excuse – she had initially been too ill to do it and then had been mis-advised by the HMRC helpline who had told her to leave it until after the baby had been born.

We had some excellent news this morning when we heard that the full £1,300 has been revoked via this message from Helen:

“They’ve cancelled them!! Thank you very very much Kelly. I’ve been feeling so awful over it all and I’m so glad it’s over now – I honestly can’t thank you enough.”

We couldn’t be happier for Helen and her family and were absolutely delighted with the outcome!

A few facts

If you have received a penalty from HMRC it may be possible to get it revoked if you have a reasonable excuse. Typically, these might be:

  • An accident or disaster – e.g. Your computer breaks down just before the deadline or your documents are lost in a flood.

  • You were too ill to file your return

  • Death of a partner or a loved one close to the filing date

HMRC do not consider the following to be a reasonable excuse:

  • ignorance of tax law;

  • pressure of work;

  • difficulty in complying; or

  • lack of reminders from HMRC.

If you have received a penalty and would like to have a chat, please feel free to give us a ring or drop us a line.

*Name changed to protect client identity

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