HMRC To challenge penalty setback

Posted: 9th January 2012

HM Revenue and Customs (HMRC) are to challenge a ruling that their practice of ‘storing up’ penalties before issuing demands for them was unfair.
The sole employee of a one-man company ceased being employed and subsequent PAYE returns were not made because it was not realised that it was still necessary. The penalty for missing the first return date was £100, but HMRC did not issue a notice then, instead letting a further five months pass, by which time the penalty had risen to £600.
Several similar cases have also been decided against HMRC. Surprisingly, HMRC have decided to take the decision to the Court of Appeal.
It is important to understand the rules that apply to the filing of forms: penalties can arise unexpectedly if you don't. If you think you have been unreasonably dealt with by HMRC, contact us for advice.