I’ll cut a long story short..

Three years ago when the recession hit my trade within the construction industry my reputation counted for sh*t. Only cheap was called for as builders needed to win quotes. When people start comparing prices there is only one way to go and that is cheaper. Nobody wants to pay you more than you ask. Cheaper site labour from foreigners as well as fellow countrymen ( with probs no children, mortgage etc. ) I decided not to be a part of the continuous price haggling and decided to work locally doing building maintenance, Garden design & construction ie Pergolas, Summerhouses, Sheds etc. for a fraction of the money I used to chase but I saw my kids a lot more, was more family orientated…took a step back from the big city if you like.

Before under the Construction Industry Scheme I was given a UTR ( Unique tax reference number ) which enabled my tax to be ‘ stopped at source ‘ @ 20% and at the end of the year I’d pay an accountant to do my returns.

However an unfortunate series of events starting on the 02 Nov 2011 including my wife being involved in a RTC and a month later her losing a much loved member of her family, ( Christmas by now )two weeks after this being told by our Landladys agent that she has decided to sell and was giving us two months to move out ( had been there 10 years ). My wife basically shut down ( depression ) and it was as much as I could do to get her motivated to get the kids to school now and again. We couldn’t find any where to live in the time given and the landlady went to court to serve us notice to get us, a family of 7, out and we had to present to the council as being ‘ homeless ‘ and my family and I were forced into temporary accomadation. whilst this was happening letters were arriving now and again from the HMRC for tax returns to be submitted. I knew I owed no tax as my profits were a fraction of what they used to be ( in 2007 I had a turnover of £280K of which 20% was stopped at source…yes HMRC took £56,000 off me that year ).
Now I have a fear of these letters and anything form related. I’d liken it to a fear of heights..when I’d see a brown envelope on the mat I’d pick it up and put it somewhere where I could ignore it as I was at my wits end trying to be a supportive husband to a ‘ sick ‘ wife,as well as supporting a family that had just lost their home, financed a move, sorting schools, colleges, etc. etc. etc. Any way the day came when I had to contact HMRC to stop them knocking on my door.
I signed up for the online services HMRC offer and did my last two returns that I was behind on. this is a massive step for me..confronting my fears big time ) .

The outcome was that I had no tax liability..so they decided to fine me instead…a massively unjust £1600 for late filing of my 2011 return. What can i do? I didn’t have the money at the time to pay an accountant and don’t have money now to pay the fine. Can’t take much more of this…

It’s crazy, I agree.

Being fined for never owing anything is mental and immoral.
(I realise the fine is for late filing etc but still, if you don’t owe anything in the first place?)

I used to be self employed but really can’t bear the thought of dealing with it now they act like this.

I can’t help with the business side other than to offer sympathy, but did you ask them what the options are? And are they factually correct to say the ’11 return was late? (is it tax year ending ’11, or tax year 11-12?)

HMRC are a law unto themselves it seems, I’m currently overpaying PAYE to “repay” an underpayment that doesn’t exist- 2 years ago I was briefly on jobseekers allowance, then got a job and started paying PAYE- submitted the DSS P45 etc. This year, they declared I’d underpaid and when I got the numbers, it turned out they were demanding PAYE for a year’s jobseeker’s allowance which I didn’t claim, even though they were getting my PAYE for my job so obviously I wasn’t getting bloody jobseekers!

And they won’t reverse it without evidence that I wasn’t getting any, but they have no suggestions of what evidence will be accepted. They keep telling me to get a P60 from the DSS, but the DSS can’t issue a P60 when there was no payment.

And of course, there’s no evidence whatsoever that I received any benefits, and they have my P45 from leaving benefits, they just don’t accept that because “you might have signed back on”. And they won’t accept bank statements because “you might have other bank accounts”. How do you prove a negative?

So- that’s not constructive but maybe it helps to know you’re not alone. Or, maybe it just helps me to have a rant!

Hope it works out for you.

The rules might have changed, but when I had to do tax returns a long time ago and was a bit late I got fined – however I got rid of most of those as they couldn’t fine you more than the amount of tax you owed. Worth at least checking that – I’m fairly sure they issued me with fines for the full amount before realising that they couldn’t make me pay them because I didn’t owe that much tax.

I lost my business due to bad debt and an accident that stopped me getting to work for a while.
My industrial unit was council owned, and they kindly agreed to clear some of my unit. The company they hired EMPTIED unit, stock and everything including my computers and accounts.

Now I face a fine. I had made a loss due to an enormous debt so no tax due.
I appealed as I hadn’t got a single piece of paperwork to present them.
They didn’t agree with my appeal 😯
Actually today I’m handing over the final piece of paperwork to an accountant/
The amount of paperwork I’ve had to request from all the people I dealt with over that year fills three filling boxes.
How they expected me to present accounts on time I don’t know? Guess?

Unfortunately HMRC have recently revised the rules whereby your fines were capped at the level of your actual liability when dealing with late submissions. Your 2010 return is probably ok from this point of view; I think 2011 returns were the first to be affected. I’m not sure there’s any appeal process but it’s worth ringing up to ask; you might at least be able to arrange some sort of payment plan.

I can’t help but I can sympathise

Three years running they fined me for not filing a tax return. Three years running I had to remind them I was an employee. I wasn’t even registered as self employed.

The highlight for me was the phone call to the helpline where I had to explain PAYE to the HMRC employee, unbelievable. Shocking incompetence at times really.

You don’t need to be self-employed to be required to file a tax return.

I can’t offer any advice but you have my sympathy. It sounds hateful. I’ve had various differences of opinion with HMRC over the years and it never gets any easier.

You don’t need to be self-employed to be required to file a tax return.

But you do need to be required to fill in a tax return.

I didn’t pay the fines, and they apologised for the errors. Eventually…. 3 years running.

We were fined for a 2 day late submission of our monthly CIS statement, on which we owed zero! They fined us £100.

You can’t ring them to discuss either.

By contrast they stop 20% at source on all my labour that I do for other people, and I pay PAYE for the two guys I employ. Consequently they owe me money – chances of me getting any interest on that……

They also had £1600 of my money for three years that they didn’t allocate to anything, but were happy to fine me for late payment of VAT / PAYE etc. They eventually paid it back to me.

Tax is a one way street. I don’t mind paying tax as I believe in supporting the country I do think they are very difficult to deal with any aspect of tax.

Not sure I understand your point above Piemonster… There’s all sorts of reasons you may be required to complete a tax return. Unfortunately, HMRC expect you to know this by osmosis or some such.

My accountant told me the mindset change is from “collection” to “generation” and to pretty much expect incompetence, phishing mail, scare tactics and ignorance from any helpline.

I don’t usually like generalisations but I have nothing but contempt for HMRC and how they treat people. Their default position is that everyone is tax fiddling scum, no exceptions.

I had to visit a VAT office so the miserable scumbag could “assess my attitude” at interview. This is where the mangy barely living creature admitted he enjoyed visiting my accountant as he could use his bus pass and claim car milage plus, have a pint or two in Staggs real ale bar in the afternoon before returning to clock off.

I’m moving to Germany so the lot of them can just **** off…….. and breathe….

Anyone from the revenue on here ?

I’ve always found them helpful and on the taxpayer’s side whenever I have phoned the self assessment helpline. Last year I was late filing a partnership return (my fault entirely) so all the partners got a fine. I wrote, explaining it was nothing to do with the others, and their £100 fines got lifted.

Anyone from the revenue on here ?

Surely that would be like admitting to being a traffic warden.

you cant beat em even when there wrong.. i gave them my bank details to let them take what they wanted to clear my 08 account. and for the next three years they have come back for more..
they even insisted this year that i had not paid my 11/12 liability even though i has a reference number on an email from them confirming payment and they had taken the money from my account.. a fortnight later they wrote asking how i wanted to use my ‘overpayment’..

when I ran my business HMRC appeared to work in an alternate reality where even letters from themselves didn’t count as evidence that I’d paid what they wanted…

Buttle,,,buttle..

In fairness to them, the tax laws in this country are hopelessly complex

That means that the lower grades of taxman probably have no idea how it all works so they do what the computer says

… and the higher grades who do get it are too busy working out how they’ll set up evasion schemes for wealthy clients once they’ve left to give a toss about sorting it out

There it only one faint bit of good news I can off about HMRC – the IRS are worse. Turns out that, being a US citizen by parentage (wasn’t born there, never lived there) I should have been filing tax returns anyway, and should have informed my bank that I’m a US citizen so they could report my income back to the States.

Bollocks to that.

Boblo, I’m probably just making a bad job of making a weak point.

Just an example of HMRC harassing someone who has no need to fill in tax returns for no known reason, even they couldn’t answer why they tried to fine me.

Nowt else more to what I was saying than that.

OP – have you actually appealed this yet?

A former client of mine went through similar a few years ago & the fines were overturned at a tribunal. IIRC, he had to go through their appeals procedure to get the the tribunal stage.

From a personal perspective, the last time I had a big issue with HMRC I gave up corresponding & went down to the local Tax Office to see a real person. No appointment, you just turn up and get seen on a first come basis. I found the staff there had a much better understanding (and authority) than those in the call centre.

sounds to me like you need to face the brown envelope fear MTFU and call them and start escalating it, keep going, dont be abusive, speak calmly and present the facts to them until your escalation gets to somebody with the power to change this and represent the facts to them. Organ grinders are tricky to find in any organisation. Monkeys are everywhere. Then back it all up with a letter if that doesnt work. This might be intimidating to somebody worried about brown envelopes but its worth 1600 quid to you and it doesnt sound like you have the funds to pay an accountant to do it for you.

Oh and you have my complete empathy, depression is a hard thing to support in a partner, you’re still with your wife which is all credit to you. Well done. My other half has had a lapse and gone into deeper depression and I’m struggling.

I’m an accountant and have to deal with them daily. The quality of the staff varies massively from some who really have no idea and need the rules explaining to them to others who will point out a more benefical way. We have built up some good contacts within HMRC over the years and know from them how badly mismanaged it is. The main problem is not enough staff to do the job properly and when they are having to deal with a person who has no idea then they are just fobbed off so they can log the next call and meet their targets, otherwise face not having their short contract renewed.
The OP, whilst I sympathise with your situation you are responsible but your accountant should have been on your case to stop you been late in filing. At the very least they could have submitted a return with estimated figures buying you a bit more time.
Rickmeister, Germany along with France can be more awkard so I wish you luck.

Write to your MP. Write to the consumer money columns that appear in various papers and of course write (formal complaint)to HMRC. Writing is always more effective that phone calls in these situations.

HMRC – easily the most, petty, incompetent, and utterly useless organisation I’ve ever had the misfortune to deal with. A kafkaesque law unto themselves.

When I had my business…. actually, sod this … I can’t even begin to recount the ludicrous experience with them without getting myself apoplectic with rage, so I won’t.

But it involved receiving wildly different estimated tax bills from 3 separate tax offices, none of whom were aware they were duplicating each other activities. And despite all the actual accounts being submitted on time, but lost. Day after day after day of my life was wasted trying, and failing, to sort their unholy mess out. Then I received a £1,500 fine for a tax bill paid late due to their utter incompetence.

You have my deepest sympathy, and wishes of good luck when dealing with these power-crazed, ludicrously officious, yet completely and utterly brain-dead ****-wits. I’d love to be positive, but in my experience over a number of years, imagine a worst-case scenario, and they’re likely to deliver it! Whether there’s any merit to it, or not.

You are dealing with utter morons!!! Be aware of that with any dealings with them

…. and breathe

HMRC drove my Dad to a nervous breakdown even when he owed nothing and he has said – only half joking – he would take his own life rather than go through another investigation.

So I know how these incompetent yet blood-sucking civil service vultures can tear families and businesses apart unnecessarily, while remaining entirely disconnected from the troubles and strife of day-to-day living the majority of the population goes through.

Edit: Binners described it far better than I ever could.

err, just thinking about going self-employed.. 😯

Getting a good accountant helps. But when dealing with HMRC be prepared… bring to mind the most incompetent, bungling, useless ****-wit you’ve ever met, then imagine their DNA mixed with the biggest most truculent psychopath you’ve encountered. That’s the ethos of HMRC

Anyone who’s ever dealt with them will immediately understand why Amazon, Google, Starbucks etc consider tax as optional for them, and just something for the little people (ie: us)

A nice little article to HMRC philosophy by Marina Hyde last week

OP, you have to confront it however difficult you find it. First, write them a letter, you can use your post as a starting point but take out everything other than the facts. I don’t know what ability they have to reduce the fine and if there is any discretion, but at worst you will be able to agree a payment plan with them. But they can’t do this if they do not hear from you.

Northwind, I suggest you file tax returns, declare your income and if they disagree, ask for a determination and appeal it if they stick to their guns. You can not be required to prove a negative.

My older brother had a severe nervous breakdown a few years back. When we got involved, it transpired that this was the end of a long slow gradual slide over a period of 5 years. In the context of this thread he’d lost the plot in his business, and not kept records or completed any form of tax return or replied to any communication during that time, in fact we found about 2 years worth of unopened mail behind his front door. Bailiffs had been in, and all sorts of bad was going on.

I contacted HMRC, and worked with them over it. I basically did an incomplete records process on his books and constructed the best accounts I could and really made a great deal of effort to resolve things. HMRC after an initial resistance were actually really helpful and courteous from about the time that they realised that I was genuinely trying to sort it out. Ultimately, all previous debts were written off leaving big bruv in the clear. They did not have to do this.

However, and its a biggy, this was as a result of really genuinely trying to deal with his responsibilities, it did not come about from ignoring the problem, them, or by being difficult.

As it happens I worked in a Tax Office for a short period about 40 years ago. What I learnt from that experience is that they do an incredibly difficult job in incredibly difficult circumstances. They have a number of techniques. Very often they will be dealing with people who for whatever reason have not kept proper records or fulfilled their responsibilities regarding tax. The standard way of addressing that is they will do the best calculation they can from previous history or incomplete records, and then dependant on the circumstances they will then present a demand for several times that calculation. Basically that puts the onus back on the punter to prove the estimate wrong……and if you can’t then its right!! Strangely enough 99% of the time the correct information magically appears.

My best advice is to follow the same path I did, good communication and genuine efforts to resolve will go a long way. They also are human and are more understanding than many give them credit for. Good luck.

Mate’s mum worked for them – repulsive woman who just loved recounting stories of the misery of others and how she had “won” by somehow breaking them…

Personal experience would suggest that pretty much anyone is free to start a business but very few are capable of gaining a full understanding of their liabilities to the taxman (me included). A bit of compulsory training for every company director / sole trader (delivered and charged for by HMRC) might alleviate some of the stresses later on – even of it just confirms the need for a decent accountant on board (built into budgeting at an early stage of the business rather than just when you face issues).

Noticed in the last few years, HMRC have stopped sending people out collecting debts if you are a day late, but rather fining you very heavily for late payments. In particular the implementation of the PAYE fines for businesses seemed a bit cack handed. For example, the due date advise given varies and they even had to put out a half baked justification/explanation as to their confusing late payment warning letter regime. I gave up getting any sense out of the VAT advise line years ago – conflicting advice, getting shouted at down the phone etc etc. However, from within HMRC you can still occasionally get to speak to someone who knows what they are talking about and are firm but fair.

You are dealing with utter morons!!!

We’re used to that on STW – daily exposure to motorists on our commutes 😀

I’ve recently swapped my mortgage to take advantage of a preferential staff rate. I’m currently awaiting the aforementioned “utter morons” to completely screw up the benefit-in-kind tax code re-calculation.

Sounds like I’ve got all this to deal with. Company director, no tax liability for 2011-12, personal tax return filed by accountant online before 31st Jan (with confirmation). A late payment notice for £650 landed on the mat yesterday 😯

My accountant doesn’t know why and is going to write to hmrc, but I’m not too hopeful after reading this thread…

Incidentally late filing of a tax return does actually mean that its been a year after you could theoretically first do it. Its not like its pressurised or anything.

Personally I have found HMRC not to bad to deal with when moving from employed to self employed and setting up a Limited company. Its always amazes me how quickly they return VAT that they owe me, usually within 2 weeks of a VAT return.

Anyway my advice would to to copy what you wrote into a letter and actually contact HMRC. Nearly every institution and company has processes to deal with people who can not afford to pay. So worst case if after explaining your personal circumstances they still insist the fine stays they should work out a long term payback plan. I also find that writing is much better than ringing as the quality of answer is better and more thought out.

Now don’t get me started on tax credits, now that is a bureaucratic joke.

Went from owing no tax to a demand for a few thousand, came from nowhere. A few years later it turns out they slipped with a decimal point. A few years after that they finally admitted no tax was due.

Just received a tax code adjustment where they seem to have applied the profit for all partners to the single tax code. Here we go again…

Actually, my annoyance at the HMRC has just abated a bit as I remembered the big fat rebate I got a couple of years ago.

The rebate was to correct a cock up they made predictably, iirc that affected millions in the end. 2009 or something.

binners – Member

HMRC – easily the most, petty, incompetent, and utterly useless organisation I’ve ever had the misfortune to deal with. A kafkaesque law unto themselves.

Ah- never dealt with the Student Loans Company then?

i have recieved a tax underpayment letter, 4 months ago i recieved a tax over payment letter and got that paid through payrole.

Both for the same year and for the same amount!!!!!! So granted i have lost nothing in the end but FFS!!!!