Keeping up to date with tax isn’t always as simple as it seems, as one taxpayer, Mr Hammant, recently found to his cost.
The cost was in fact £1,200, and the expensive bill arose because Mr Hammant thought he had filed his Self Assessment tax return online, and didn’t discover that it hadn’t been submitted correctly until over a year later.
Mr Hammant had signed up for paperless communication from HMRC, and not realising that anything had gone wrong with the tax return filing, hadn’t seen the need to check his personal tax account for some time. He also mistakenly believed that ‘important’ communications from HMRC would be sent in the post. This meant that penalty notices, reminders and statements were clocking up in his personal tax account, unnoticed. And in the meanwhile, £1,200 accrued in penalties – despite no tax being due on the return itself.
When Mr Hammant finally realised what had happened, he acted at once. The tax return was filed, and he made an appeal against the penalties. But the appeal was not allowed, and the penalties stuck.
It comes as a shock to many people to realise just how inflexible the tax system can be. HMRC did not give up the penalties in this case: and indeed, it has only limited discretion to do so. The First-tier Tax Tribunal weighed up the law, but it, too, has only a certain amount of wriggle room.
The best plan is always to get it right first time: to be on top of the deadlines, and to know how to meet your tax responsibilities.
If you would like more information or any advice on this article, please contact us by emailing solutions@ellacotts.co.uk or call us on 01295 250401. You can also contact us here with your query, and we will get back to you.
* Information for readers: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.
Business Newsletter – May 2025
