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Agricultural firms warned over incorrect HMRC annual return fines

Leading North West accountants Mitchell Charlesworth is warning small firms to be wary of a slew of inaccurate fines being issued in the last month by HM Revenue & Customs for late submissions of end-of year tax returns.

mitchell charlesworth

Mitchell Charlesworth issued its plea after the case of Hok Ltd v HMR&C, which saw the firm’s 400 fine for failing to file a P35 reduced to 100, because the penalty was not sent out until four months after the error was made.

The firm has offices in Liverpool, Manchester, Chester, Warrington and Widnes.

Mitchell Charlesworth payroll manager Joanne Nieman said a raft of companies have been hit by similar fines over the last month.

She is now urging any firm worried or concerned about fines related to the late filing of Employers Annual Return forms to contact a payroll specialist immediately.

“The fine structure has seen businesses being charged per month after missing the tax return deadline,” said Mrs Nieman. “But critically many of these firms weren’t informed until several months down the line. It is a

ludicrous scenario because many businesses would have remedied the situation much earlier had they been made aware.” She added: “Many firms have taken the matter to tribunals and have been successful in getting these fines waived through formal appeals.

“Many new cases came to light in recent weeks when the HMR&C issued penalty notices for late P35s. This led accountants and lawyers to warn company owners to check their post.”

Mrs Nieman said HMR&C designed the timetable for issuing penalties to allow a reasonable period for employers to give notice if they have no return to make.

She added: “There are real problems with this penalty notice system. A number of first tier tax tribunal judges have criticised HMR&C for not issuing penalties earlier. We would advise anyone who feels a fine issued against them is unfair or excessive to seek help and challenge the appeal.”

A further HMR&C computing issue has seen a number of Mitchell Charlesworth clients receiving penalties for non-submission of P35 forms despite logging nil returns with the HMR&C website.

The firm said that even though submission receipts were emailed to firms, nil return submissions had not been recorded.

Mrs Nieman added that a recent investigation at HMR&C revealed a problem in dealing with P35 ‘no return to make’ notifications. This has resulted in some penalty notices being issued in error.

Anyone seeking advice on P35 forms can email: or call Liverpool: 0151 255 2300 Manchester: 0161 817 6100 Chester: 01244 323051 Warrington: 01925 635141 Widnes: 0151 423 7500

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