HMRC urged to show leniency towards late tax return payers

The Federation of Small Businesses (FSB) has said that HMRC should show leniency toward tax payers due to their poor relationship with the self-employed over the last year.

Examples include inaccurate reminders and penalty notices, phishing emails, poor customer service and an ‘unreliable tool’ for assessing employment status.

As well as this, latest HMRC statistics show that one in five callers to their helpline are left waiting more than 10 minutes to speak to an advisor.

FSB National Chairman Mike Cherry, commented, “HMRC’s performance over the past year has been nothing short of calamitous.

“From premature late penalty notices, to misleading demands for payment, to increasing call waiting times, the self-employed are being let down time and again by this increasingly ill-equipped agency.

“When considering action against sole traders who have struggled complete returns, HMRC officials should have a good look in the mirror and consider their own shortcomings.

“They must remember that the self-employed are specialists injecting much-needed expertise and flexibility into our economy. The vast majority are not tax specialists – and they don’t have time for hold music.

“Looking ahead, HMRC’s plans to downsize are cause for concern. It’s hard to envisage any improvement to its customer services off the back of so many office closures.”

The LITRG are also reminding people of their right (in certain circumstances) to contest HMRC’s late self-assessment penalties.

If circumstances have prevented someone from complying with their tax return obligations, LITRG reminds them that they may be able to avoid a penalty by claiming they have a ‘reasonable excuse’.

Head of LITRG Team, Victoria Todd, said, “Most taxpayers will want to do everything they can to file their tax return to HMRC on time, however, sometimes that may not be possible and HMRC will automatically issue a late-filing penalty.

“Where someone thinks they have a reasonable excuse for having missed the deadline, they must provide details and, where possible, evidence in support of those details to HMRC. It may be that a combination of reasons, rather than any one thing, may constitute a reasonable excuse to HMRC.”

She added, “It is up to the taxpayer to appeal a penalty if they wish to claim they have a reasonable excuse. If HMRC agree with the appeal the penalty will be removed, however if they don’t, it is possible to challenge HMRC’s decision as HMRC do not have the final word on whether or not an excuse is reasonable; that question is ultimately for the courts to decide. If someone is unable to agree with HMRC, they can ask HMRC to review the decision and/or appeal to the First-tier Tribunal.

“If someone claims a reasonable excuse, they must comply with the obligation in question without further delay, for example, submit a late tax return as soon as possible. This is because the law on reasonable excuse requires people to remedy a default within a reasonable time after the excuse has ended.”

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