Case decided by First-Tier Tribunal (HOK Ltd v HMRC, TC01286 \u2013 25 July)
\nEvery employer has to submit end-of-year PAYE returns in form P35 and P14 to reach HMRC by19 May. If the returns are filed late, a penalty of \u00a3100 per 50 employees for each month or part month that the return is outstanding is charged. If the returns remained outstanding for more than four months, HMRC issues a penalty notice shortly after 19 September.<\/p>\n
In a case decided by the first-tier tribunal (FTT) on 25 July 2011, the employer HOK Ltd failed to file the return by the deadline, assuming it wasn\u2019t obliged to do so as its only employee had left employment part way through the tax year. HMRC on its part imposed a penalty of \u00a3400 (\u00a3100 x 4 for four months) on 27 September. HOK appealed against the penalty on the basis that the level of penalty \u2018was manifestly excessive especially as HMRC had already received the necessary information that the appellant’s last employee had ceased employment part way\u2019 through the tax year. The FTT whilst accepting HOK\u2019s contention allowed the appeal in part. It observed that \u201dHMRC deliberately waits until four months have gone by and does not issue the first interim penalty notice until, as in this case, September of the year of default. By that time a penalty of \u00a3400, being four times \u00a3100 per month is said to be due. In fact, if the penalty notice operates as a reminder and the taxpayer undertakes the necessary filing forthwith, a further one month penalty arises because the de facto reminder is received only after it is too late to avoid a further \u00a3100 penalty. Thus, the effect of HMRC desisting from sending out a penalty liability notice very soon after 19 May of the relevant year, and choosing deliberately to delay that penalty notice until four months have gone by, is to result in the taxpayer facing a minimum penalty of \u00a3500\u201d<\/p>\n
It therefore concluded that \u201cHMRC has neither acted fairly nor in good conscience, in the manner described above\u201d and reduced the penalty to just \u00a3100 i.e. for one month.<\/p>\n","protected":false},"excerpt":{"rendered":"
Case decided by First-Tier Tribunal (HOK Ltd v HMRC, TC01286 \u2013 25 July) Every employer has to submit end-of-year PAYE returns in form P35 and P14 to reach HMRC by19 May. If the returns are filed late, a penalty of \u00a3100 per 50 employees for each month or part month that the return is outstanding […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[56],"tags":[],"class_list":["post-452","post","type-post","status-publish","format-standard","hentry","category-news"],"yoast_head":"\n