Question about HMRC practice

PragueAddick

Does anyone know whether nowadays HMRC sends reminders when people or companies have failed to pay a bill on time. Specifically, a VAT bill?

And if they don't do they charge penalties based on days' overdue? So that people run up huge penalties because they have been unaware they missed a payment?

kentaddick

Pretty sure they'd chase you, especially for VAT as they're very hot on that

kentaddick

Give them a ring and ask?

Red_in_SE8

I am pretty sure they don't chase you and you do incur penalty fines which just get added to what you owe. It is certainly the case when you miss a tax payment on the 31 Jan or 31 July.

mcgrandall

Basically yes, but they should cancel any charges if you were not originally told of the offence. It seems like a massive con, bacause it will take them days to process any paperwork or they actually bar you from accessing your account on their website for ten days if you have never used it before, all the while, charging you.

HRMC just isn't fit for service and has faced huge cuts in recent years. But why would the Torres worry about making their mates pay what they should, when poor people, who can't afford accountants, can rack up huge fines unknowingly.

LenGlover

You can get email reminders for VAT but need to register.

https://ion.icaew.com/taxfaculty/b/weblog/posts/vatreturnsgetemailremindersfromhmrc

LuckyReds

VAT is online only now isn't it? Doesn't it show you the key dates you need to know if you log in via the government Government Gateway account linked to your company?

Edit: I thought you needed to know when your payments were due, I actually logged on to check mine to see if it was possible.. seems I should read the post a bit more carefully, sorry!

thai malaysia addick

I was late paying our VAT about 3 years ago due to an administration error. They would not accept any excuses despite our 100% clean track record. We received no penalty but were on a very punitive scheme if we were late again for the next year. I think it was 33% surcharge or something similar. I made sure that it was paid on time for the next year and called them to verify receipt.

IdleHans

Bloody useless they are. I've just employed myself in my own (one man) company on PAYE, and though I'm due a huge income tax refund for February they are refusing to pay it (back to the company) 'in case my tax circumstances have changed'.
Of course they've bloody well changed, I've just started working again for the first time since July, hence the refund being due.
So as ever, the tax payer is out of pocket because their systems can't cope. If it were the other way round they'd be flinging out penalty notices like confetti. My contempt for them knows no bounds.

Off_it

PragueAddick said:

Does anyone know whether nowadays HMRC sends reminders when people or companies have failed to pay a bill on time. Specifically, a VAT bill?

And if they don't do they charge penalties based on days' overdue? So that people run up huge penalties because they have been unaware they missed a payment?

They do still send demands, etc, by post but the "reminder" of the green form dropping through the door doesn't happen now as it's all online.

As for late payment, whether you get charged any extra depends on exactly what you owe them for.

If it's paying a return late then you basically get the first go free and you only then get a surcharge (which is based on a flat percentage of the net tax outstanding) if you are late again within 12 months.

Surcharges start at 2% and ratchet up each time you are late to a maximum of 15%. After 12 months paying on time everything resets back to Zero and you start again (ie free go first time, 2% next time, etc).

However, if you've been assessed for an under declaration, such as following an inspection, you have 30 days to pay otherwise they start charging you interest, which mounts up daily. Also in these cases a penalty may be due (anything from 0-100%, depending on how bad you've been)

My tips for the day? If your struggling to pay your VAT and have a perfect record for the past then don't worry too much and treat it like an interest free loan. They will send threatening letters eventually, but there will be nothing more to pay on top if it's your first time.

Also, if you're struggling and don't have a great record then still get the return in and pay what you can by the due date as the surcharge is calculated on the amount outstanding not the amount due, but after that wait for them to chase you. The surcharge is the same regardless of whether you're one day, one week or one month late in paying.

Now, where should I send my invoice?

Off_it

IdleHans said:

Bloody useless they are. I've just employed myself in my own (one man) company on PAYE, and though I'm due a huge income tax refund for February they are refusing to pay it (back to the company) 'in case my tax circumstances have changed'.
Of course they've bloody well changed, I've just started working again for the first time since July, hence the refund being due.
So as ever, the tax payer is out of pocket because their systems can't cope. If it were the other way round they'd be flinging out penalty notices like confetti. My contempt for them knows no bounds.

You do realise the irony of that post, don't you?

Off_it

thai malaysia addick said:

I was late paying our VAT about 3 years ago due to an administration error. They would not accept any excuses despite our 100% clean track record. We received no penalty but were on a very punitive scheme if we were late again for the next year. I think it was 33% surcharge or something similar. I made sure that it was paid on time for the next year and called them to verify receipt.

So you were late because of your own error but they never charged you anything, because of your previous good compliance record.

I'm one of their biggest critics, but surely you did alright by them there?

PragueAddick

Thanks all for your answers. The reason I asked is that here in the Czech Republic the tax office is not just useless, but appears to wage war on its citizens on the basis that we are all tax avoiders. Our accountants (who also have questions to answer) were preparing our return for 2016 and suddenly noticed that we had not paid our VAT for q1/16. The tax office never send reminders but just gleefully rack up the penalty based on interest accrued daily. The penalty in this case, after nearly a year of lateness amounts to around 19% of the actual bill, and unfortunately that quarter was good for us revenue wise. It was obviously a mistake because we paid subsequent quarters bang on time, but we are advised not to appeal not just because we won't get anywhere but because appealing can attract the tax office' more general attention. Sinister, but not without foundation. I think even I don't fancy that particular risk just for the sake of speaking out.

That said, I thought I can at least join the broader debate by blogging about it as a moral and civic society issue - the tax office behaviour is a hot topic now - but it suddenly struck me that maybe HMRC is just as bad. In fact from your responses there are in fact several points where they are in fact far more reasonable, which i will use in my blogpost.

Any further comments welcome, especially now you know the reason i am asking.

IdleHans

Off_it said:

IdleHans said:

Bloody useless they are. I've just employed myself in my own (one man) company on PAYE, and though I'm due a huge income tax refund for February they are refusing to pay it (back to the company) 'in case my tax circumstances have changed'.
Of course they've bloody well changed, I've just started working again for the first time since July, hence the refund being due.
So as ever, the tax payer is out of pocket because their systems can't cope. If it were the other way round they'd be flinging out penalty notices like confetti. My contempt for them knows no bounds.

You do realise the irony of that post, don't you?

It's clearly passed me by. I have done it by the book, filed the PAYE return for the month online well within the deadline, using proprietary HMRC approved software, used the tax code and YTD earnings/tax deducted on my P45, and although they acknowledge the company is owed over £5k they are refusing to pay it in case the employee's tax circumstances have changed.
Surely that's between the employee and the tax office, not the company.
In fact, they'll end up owing even more as the tax code is far too low anyway.

so, yes, the irony escapes me.

As ever, the balance is tilted wholly in their favour.

Off_it

IdleHans said:

Off_it said:

IdleHans said:

Bloody useless they are. I've just employed myself in my own (one man) company on PAYE, and though I'm due a huge income tax refund for February they are refusing to pay it (back to the company) 'in case my tax circumstances have changed'.
Of course they've bloody well changed, I've just started working again for the first time since July, hence the refund being due.
So as ever, the tax payer is out of pocket because their systems can't cope. If it were the other way round they'd be flinging out penalty notices like confetti. My contempt for them knows no bounds.

You do realise the irony of that post, don't you?

It's clearly passed me by. I have done it by the book, filed the PAYE return for the month online well within the deadline, using proprietary HMRC approved software, used the tax code and YTD earnings/tax deducted on my P45, and although they acknowledge the company is owed over £5k they are refusing to pay it in case the employee's tax circumstances have changed.
Surely that's between the employee and the tax office, not the company.
In fact, they'll end up owing even more as the tax code is far too low anyway.

so, yes, the irony escapes me.

As ever, the balance is tilted wholly in their favour.

Ah, well maybe the cynic was too quick to jump to a conclusion, in which case I apologise. It's been a long week and I've spent all day tying to bail out people who thought they were doing something "clever" with their tax only to fuck it up, and worse.

I saw the "I've just employed myself through my own company" comment and thought you may be going down the dividend vs salary route.

If you're not sure how that works ask Prague, he's an expert and has been doing it for years!
;-)

IdleHans

I'm just doing work the nature of which makes it sensible that I have limited liability. It's not about reducing my tax bill at all.
Though those chaps at HMRC have just pushed me hard in the direction of doing all I can to reduce my tax bill, when otherwise I'd be happy just to put myself through PAYE (as I tried to do) and take the costs and admin that come with that for an easier life.

AddicksAddict

Off_it said:

IdleHans said:

Off_it said:

IdleHans said:

Bloody useless they are. I've just employed myself in my own (one man) company on PAYE, and though I'm due a huge income tax refund for February they are refusing to pay it (back to the company) 'in case my tax circumstances have changed'.
Of course they've bloody well changed, I've just started working again for the first time since July, hence the refund being due.
So as ever, the tax payer is out of pocket because their systems can't cope. If it were the other way round they'd be flinging out penalty notices like confetti. My contempt for them knows no bounds.

You do realise the irony of that post, don't you?

It's clearly passed me by. I have done it by the book, filed the PAYE return for the month online well within the deadline, using proprietary HMRC approved software, used the tax code and YTD earnings/tax deducted on my P45, and although they acknowledge the company is owed over £5k they are refusing to pay it in case the employee's tax circumstances have changed.
Surely that's between the employee and the tax office, not the company.
In fact, they'll end up owing even more as the tax code is far too low anyway.

so, yes, the irony escapes me.

As ever, the balance is tilted wholly in their favour.

Ah, well maybe the cynic was too quick to jump to a conclusion, in which case I apologise. It's been a long week and I've spent all day tying to bail out people who thought they were doing something "clever" with their tax only to fuck it up, and worse.

I saw the "I've just employed myself through my own company" comment and thought you may be going down the dividend vs salary route.

If you're not sure how that works ask Prague, he's an expert and has been doing it for years!
;-)

If he's just employed himself, surely he's going down the salary v dividend route, not vice versa.

bazjonster

kentaddick said:

Give them a ring and ask?

Yeh, but make sure it's at 8am on a Saturday morning if you want to get through. And if you do, it's then hit and miss as to whether you get anyone who actually knows what they are talking about!!