Taxpayers who are more than three months late in filing their self-assessment tax return become subject to a late filing penalty of £10 per day.
In a recent appeal, the first tier tribunal (FTT) considered the specific legal requirements for a valid notice of the £10 daily penalty. The law says that in order for a taxpayer to be liable to the daily penalty, HMRC must decide that the penalty should be payable and must give notice to the taxpayer specifying the date from which the penalty is payable.
HMRC relied on the wording in the self-assessment tax return and payment reminder (SA reminder) and the SA326D notice (notifying the charge to a £100 fixed penalty). However the FTT took the view that those notifications were not specific enough, particularly as they did not show the precise date from which the penalty was payable.
Any taxpayer who has become subject to daily penalties should consider whether the outcome of this case is applicable to their own circumstances.
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