Accountants charge and IR penalty.

[Agile]

A friend does work in peoples homes and is paid without deduction of tax by cheque.

Every year the list of cheques is given to an accountant who completes the tax return and sends it to the IR by the 31st January. He charges £100 for this.

Although sent to the accountant about the 13th January, this year the accountant did not send it to the IR in time and the tax payer was sent a penalty demand for £1000.

Accountant explains the problem to the IR who agree to halve the penalty to £500 which the accountant expects the taxpayer to have to pay.

Is this normal/reasonable?

Tony

 

[Bosswhite]

I would say its the Accountants responsibility the information was sent in within reasonable time
but can the friend confirm the date the information was sent, i.e recorded/signed for details.

 

[Astra99]

I would say the accountant is the culpable party. He KNEW the deadline, he ACCEPTED the paperwork on 13 Jan and therefore, albeit tacitly, agreed there was sufficient time to submit by the deadline.

I would also be looking for another accountant!

 

[Bosswhite]

As Astra Points out the Accountant convinced the Tax Office the papers were submitted by the correct date so the Accountant is liable,
Looks like a small claims court job.

 

[Newboy]

I understood that the penalty for late submission was £100 (initially) not £1000.

Either way, unless the accountant advised your friend of a condition which your friend breached, the accountant is liable - simple breach of contract.

 

[Newboy]

Just checked HMRC late filing penalties:


1 day late

A penalty of £100. This applies even if you have no tax to pay or have paid the tax you owe.


3 months late

£10 for each following day - up to a 90 day maximum of £900. This is as well as the fixed penalty above.


6 months late

£300 or 5% of the tax due, whichever is the higher. This is as well as the penalties above.

12 months late £300 or 5% of the tax due, whichever is the higher.
In serious cases you may be asked to pay up to 100% of the tax due instead. In some cases the penalties can be even higher than this.
These are as well as the penalties above.

 

[longdogs]

Although I agree that the accountant was at fault, I believe that we are ultimately responsible for the payment of our taxes.

I once had the situation where my employer hadn't paid my NI for a whole year. After being made redundant, I got a bill for the amount. I explained that I had been employed but it made no odds.

 

[phatboy]

Although I agree that the accountant was at fault, I believe that we are ultimately responsible for the payment of our taxes.

I once had the situation where my employer hadn't paid my NI for a whole year. After being made redundant, I got a bill for the amount. I explained that I had been employed but it made no odds.

In that situation, I would show that my payslips showed the deduction, and I would then expect to be no longer responsible, I had reasonable evidence to show it was being paid.

 

[cajar]

It doesn't matter, you are still liable. HMRC take no prisoners.

 

[noseall]

It doesn't matter, you are still liable. HMRC take no prisoners.

This is a fact.

 

[nickjb]

Paying someone £100 to add up some cheques and fill out a form that takes 10 minutes seems a bit excessive to start with. The only reason would be to protect yourself from mistakes like this. IMO it should be down to the accountant but IR will chase the tax payer.

 

[flameport]

£1000 seems wrong as suggested already, this is certainly NOT the 'normal' late submission fine. They need to establish exactly what this amount was for - fines, unpaid taxes from previous years, other?

Sending items to your accountant 18 days before the submission deadline is asking for trouble - a list of cheques does not take 9 months to produce.

It's not likely that the agreement with the accountant will involve them accepting liability for late submissions or very much at all, and even if it did, fines and similar are down to the individual to pay.
Whether they can claim anything from the accountant later is another matter entirely.

 

[ban-all-sheds]

It doesn't matter, you are still liable. HMRC take no prisoners.

This is a fact.

Yup.

I know some people who were employees of a company which went t*ts-up.

The directors, of course, walked away scot free, even after it was shown beyond any doubt that they had been deducting, and then pocketing, the income tax due on their employees salaries, and HMRC added to the employees woe of being out of work and owed salaries and expenses, by going after them for the unpaid tax.

The same directors also stitched up a number of suppliers (they were resellers) by ordering equipment which they then sold at a stonking loss to another company which they controlled (like items worth £100'sK being sold for £1) in the months leading up to the final collapse.