Not filed tax return?! HELP

[sunmonlight]

I have just opened a letter saying that I owe if excess of £3k to HMRC.

I've been unwell the past year and rubbish at opening my letters so I can see how I have missed this. I'm so cross with myself.

It's for a business I set up a couple of years ago about never started trading or made a penny.

I'm clueless. Can I repay in instalments? What can I do? I can't afford this. I'm desperate.

Call them and set up a payment plan.

You need to call them. Talk through the situation with one of their advisors and they may waive some of the penalties for non filing of assessments. They’ll set up a payment plan etc. call today as there’s no point delaying the inevitable.

Is it a Self Assessment tax return? Or did you set up a Ltd company and have not done any company annual returns?

First things first,
Are you a sole trader (for example self employed) or did you set up a Limited Company (for example are you a Director of the business)

I appreciate you say you haven't traded, but if you have been sent tax return to complete, yiu have to deal with it - you can't ignore it.

So, what it sounds like has happened is, you have not done your tax return and the £3k is fines and a tax determination of what HMRC thinks you should pay.

All you need to do is get on the phone. You may have to still pay fines, but you can ask if you can file a return

Just posting as I am in a similar situation

If you never started trading or made any money, how can you owe £3k?

There could be some fines but surely they won't amount to that much, and if you can provide evidence of your illness (did you go to the doctors at all)? You should be able to get it significantly reduced.

This is very likely to be one of those times where if you call and explain, they'll help you, but if you continue to ignore the letters it will continue to get worse.

Call them. if you can get a hold of a human being they do tend to be helpful to anyone actively trying to pay their taxes.

Only call a number you find on the official HMRC website. Do not call a number from this letter in case it’s a scam!

Don’t panic just call them and you can pay in instalments x

This 100%. I get fake emails from “HMRC” all the time.

If it's Self Assessment then the deadline is the same every year. I must have had a dozen test reminders and the same number of emails last year in the run-up.

Ring HMRC and explain. You need to find out how much of the £3k is a late filing penalty and how much is an estimate of how much you owe. The penalties are:

• 1 day — you’ll have to pay a penalty of £100
• 3 months — you may have to pay a penalty of £10 a day, for a maximum of 90 days (£900)
• 6 months — you may have to pay a further penalty of 5% of the tax you owe or £300, whichever is greater
• 12 months — you may have to pay a further penalty of 5% of the tax you owe or £300, whichever is greater – in some cases, you may have to pay up to 100% of the tax you owe

You're at 3 months late, so the £900 penalty. Meaning they think you owe £2k+ in tax.

If you've genuinely not been trading and don't have an income then by submitting a return declaring this you can quickly reduce the amount owed to just the penalty amount. Then you can work on that by explaining the circumstances for the late filing and hope for a bit of sympathy to reduce it down.

It might be a scam - received one today too and they look very very realistic with personal, correct information. Please triple check before making any payments!

If you never started trading or made any money, how can you owe £3k?

If you are sent a letter saying you need to complete a tax return, self assessment or a corporation tax return, you have to deal with it. You can't ignore it.

If you ignore it, HMRC will send you fines for not completing it.
But then, if you continue to ignore it HMRC will also calculate what they think you owe in tax. This is called a Revenue Tax Determination.

If people were just charged fines for not completing tax returns, they would just pay the fines snd never pay any tax.

So, if you still don't complete a return and tell HMRC how much tax you owe, HMRC will come up with thier own tax figure for you.

That's why it's best to never ignore letters from HMRC.

It might not be from HMRC though. It might be a scam.

It could be.

But letters dont tend to be scams. Scams are normally phone calls and texts.

But yes, if the Op is in anyway concerned, she should Google the telephone number for HMRC helpline (either self assessment or corporation tax) and use that number to call rather than the one on the letter.

If you never started trading then you wouldn't pay tax because you wouldn't have any profit surely ?

So the money must be fines plus maybe what minou123 says if you have left it long enough.

When you say "a couple of years" does that mean 2 years or more than that ?

I am not sure what the best way forward is. You will be better off speaking to an accountant, because I am not sure what the best option would be, paying the tax/fines or winding the company up. And the associated consequences/costs of that ...

OP I used to work for HMRC and issued many Revenue Determinations.

The object of it is to get you to complete the outstanding Returns.

Just ring them and explain you never actually traded at all. There should be nothing to pay as fines can never exceed the amount if tax actually due on trading profits.

Caveat - I retired over 10 years ago so it may have changed.