P35 HMRC Penalty Outrage?
We all realise that the Chancellor and Her Majesties Revenue and Customs are keen to increase the amounts of tax they gather but they do appear to have gone rather over the top with Penalty fines of £900 which have been issued to many small businesses in the West Country over the past month relating to late submission of P35s. Combined with the increase in Corporation Tax for small businesses announced in the recent budget many local owner managers must be wondering if they have become the prime tax target.
P35s are the annual return employers have to submit each May with details of all money paid to employees. If they are not submitted on time there is a £100 fine for each month they are late. Last month approximately 150,000 £900 fines were issued to employers whom, it was said, were nine months late.
Closer examination has revealed that many of these fines were issued to people who had a nil return and did not realise they had to still complete the form. Others are to people who claim they did return one and haven’t been told otherwise. Others were to people who had neglected to complete the form – possibly not fully understanding this element of mass of bureaucracy which small businesses are subjected to.
Catherine Vickery, Tax Manager at Old Mill Accountancy in Yeovil comments, “Whatever the circumstance of each transgressor it does seem to be unreasonable not to let them know that they have done anything wrong for nine months until they have accumulated a £900 fine. It would appear that no reminders or previous notices had been sent. Depending on the circumstances, we are recommending that the majority of these penalties should be appealed against, and are expecting dramatic reductions in many cases.”
If you do not agree with the penalty you are entitled to appeal – however these appeals will have to be submitted by 23 April. If you know of anyone caught out please act fast. Catherine can be contacted on 01935 426181.
Ends.