HM Revenue and Customs (HMRC) are to challenge a ruling that their practice of ‘storing up’ penalties before issuing demands for them was unfair.
The practice was challenged when the sole employee of a one-man company ceased being employed and the subsequent PAYE returns were not made because it was not realised that it was still necessary.
The penalty for missing the first return date was £100, but HMRC did not issue a penalty notice then, instead letting a further five months pass, by which time the penalty had risen to £600.
Several similar cases have also been decided against HMRC. Surprisingly, HMRC have decided to appeal the decision to the Court of Appeal.
It is important to understand the rules that apply to the filing of forms: penalties can arise unexpectedly if you do not. If you think you have been unreasonably dealt with by HMRC, contact us for advice.