We have been approached by a number of tax payers recently with big penalties for not filing tax returns they didn’t realise they had to file. It’s surprising how often people forget or just aren’t aware.
A recent case was of a guy who did a bit of work in 2006/7, yes 2006/7!, under the construction industry scheme “CIS” and HMRC asked for a return for that year and every one following. He actually had a job and there was no reason for him to file a return other than that year. It took a while for them to catch up with him and then let things fester unfortunately and we are currently trying to sort out £5,000+ of penalties when in fact the income was a few hundred pounds.
Another case was of an individual living abroad who was not sent his correspondence from HMRC. He had a rental property that he shared with his estranged wife, hence the reason he didn’t get the paperwork. We managed to reduce the penalties significantly.
If you receive a request to file a return and you don’t think you need to don’t ignore it. HMRC are quite happy to take you out of the self-assessment system but if you leave it they will hit you with penalties.
Here is guidance from HMRC gov.uk/government/uploads/system/uploads/attachment_data/file/354412/sa370-notes.pdf