Late Filing Notice - Tax Return wasn't required?

[Whatevertheweather]

Hello,

I wonder if anyone can help - DP received a letter yesterday from HMRC with a £100 late filing notice penalty for the tax year 09/10. He didnt file one as his self employment ceased in December 2008 and therefore we didnt think one would be required. He advised HMRC over the telephone he has ceased self employment and they said theyd update his record.

He claimed JSA March-May 2009 and has then been employed ever since.

We did receive a pack in July 2009 about needing to file a return so at that time we wrote in and said his self employment ceased Dec 08 so no tax return was due. We received an acknowledgement letter and confirmed again his account has been updated.

Can't get through on the telephone to speak to anyone so have written a letter explaining situation and enclosing copy of acknowledgment letter from HMRC. But just wanted to double check - were we right not to file a return and therefore the penalty is not enforceable?

Bump sorry i know it's really boring!

They can't fine you more than you owe so I suggest he files one which will show a nil value.

Dh had a penalty notice for being late one year (he handed it in person but they claimed it was late) but as he didn't owe anything that year and in fact was due a refund they couldn't fine him.

July 09 seems very early for HMRC to write to your DP about his 09/10 tax return, 18 months before it needed to be filed, are you sure you have your dates correct??

Usually if HMRC ask you to complete a tax return then you need to do it. Did they confirm when you spoke to them that he didn't need to complete the tax return, or just that he was no longer registere as self-employed?

AFAIK they will fine you £100 if you file late, or pay any tax due late, but will stand corrected if that is not actually the case, as elphabadefiesgravity says.

If they confirmed in writing that your DP would not need to complete a tax return, then he will not be fined, and you should send the letter to them.

Thank you both. Baba am not 100% sure that's what it was just guessing from memory. We received something in July 09 definately as that is what prompted us to put in writing re the cessation of self employment.

The return letter merely says thank you for your letter date 19th July 2009 we have noted that self employment ceased in December 2008 and have updated your account to reflect this. No mention of filing a tax return or not. Have sent them a copy of that letter with the appeal.

I assumed (perhaps wrongly) that as self employment ceased in dec 2008 and a tax return was filed and paid in January 2009 for 07/08 and in January 2010 for april-dec 2008 that we were all square and that I needn't file in January 2011 as he was not self employed at all from April 09 to April 10? Or have I got that totally wrong?!

if HMRC have issued either a return or a notice to file a return then you have to file it.

HMRC are often very behind with their post so what often happens is a person will have a bit of an overlap between ceasing and HMRC getting their records straight that a return is no longer required.

Once they have worked out there are no returns needed they will write a letter along the lines of 'we have reviewed your record and no longer require you to complete a return'

Unless he's had this I suspect, according to HMRC, he needs to do one.

But, the fine will be revoked if his liability for the year is less than £100, which by the sound of it it will be.

My advice would be to file a return for 2009/10 asap with a note in the additional information box to say NO LONGER SELF EMPLOYED

Be aware because it is now March he may well get a return for 2010/11 too as they are so far behind with updating their systems. If a return or notice to file a return for 2010/11 is issued he will need to complete that too.

You should note that if they issued a notice to make a return - then they expect a return to be made.

If nil tax payable, the penalty will be reduced to nil but this is the last year they are applying this concession - next year it will be £100 if tax due or not.

Also, JSA is taxable and must be included in a tax return along with any Self employed profits and employment income.

so be careful as tax may be due on his JSA dependent on his level of income

I do not work and have only bank account interest as income, future pension and ISAs as investments. I am still required to file tax return (I called and HMRC insisted I do it for now).