SA Notices on the way - update from the ICAEW

But HMRC reacts sensibly to worries over unfair use of new filing penalty

As anticipated, HMRC has advised us that from 17 February, it will begin sending out penalty notices to all taxpayers who failed to file their 2010/11 returns by the 31 January deadline. What is a surprise is HMRC has also said it will cancel any outstanding returns and associated penalties where taxpayers call them and explain that they do not need to be in the self assessment (SA) system. HMRC will be sending a flyer with the penalty notice inviting taxpayers to phone on the general SA helpline number if they think they don’t need to be in SA.

This will also apply to taxpayers who are dealt with in Personal Tax International who are advised to call the dedicated helpline number.

The full message reads:

For information - from 17 February, all customers who failed to file their 2010/11 return online by the deadline will receive a flyer with their penalty notice inviting them to phone us on the general SA helpline number if they think they don’t need to be in SA. A copy of the flyer is attached.

Our contact centre staff will ask them some questions and if we decide we don’t need the return back we will advise the customer that we will cancel the return and remove the penalty.

This additional step has been introduced to mitigate the impact of the new penalty regime, such as by ensuring customers who have to pay penalties are people we need to be in SA whilst others are taken out.

Obviously we hope that customers dealt with in Personal Tax International will call our dedicated helpline number. We will also 'cancel' their return and penalty if it becomes clear that they should no longer be within the SA system.

If any of our PT International customers do contact the 0845 Helpline we will receive notification and make a decision as to whether they should complete the SA return or not. We will write to these customers.

We have been warning readers for some time about the new penalty rule introduced this year which means that if you missed the deadline you will have to pay a £100 late filing penalty even if you had no income to report or no tax to pay.

In other cases, it is of course still possible to claim reasonable excuse for filing late, see our news story Tax return filing - what is a reasonable excuse?

To read more about the new rules on penalties, refer to our news item 31 January, an even more important date.