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HMRC have issued guidance on late-filing penalties and enquiry time limits for 2007-08 self assessment paper returns.
Paper returns delivered before midnight on Friday 31 October will be on time. Returns delivered by hand and found in an HMRC office letter box when first opened on Monday 3 November will be treated as delivered on Friday 31 October for all purposes. They will not attract a late-filing penalty and HMRC cannot give a notice of enquiry after 31 October 2009.
Similarly, returns delivered by hand on Monday 3 November after the relevant office has opened will not attract a late-filing penalty. However, the date of delivery will be Monday 3 November, which means that HMRC can give a notice of enquiry up to and including 31 January 2010.
Returns delivered by hand and found in an HMRC office letter box when first opened on Tuesday 4 November will be treated as delivered on Monday 3 November and will not attract a late-filing penalty, but the date of delivery means that HMRC can give a notice of enquiry up to and including 31 January 2010.
Returns delivered by hand on Tuesday 4 November after the relevant office has opened will attract a late-filing penalty and the enquiry notice will be up to and including 31 January 2010. This is also the case for returns received by post on Monday 3 November or Tuesday 4 November.
A late filing penalty incurred for filing a paper return after 31 October as above cannot be mitigated by subsequently filing an online return before 31 January.
Where a return cannot be filed online, e.g. returns for trustees of registered pension schemes and non-resident companies, a paper return delivered after 31 October, but on or before 31 January, will be treated as delivered on time. HMRC will be able to issue a notice of enquiry up to the end of the period of 12 months after the day on which the return was delivered.
Where the notice to file a return was issued after 31 July, the deadline for filing a paper return will be three months after the date the notice was issued and the deadline for an online return will be the later of three months after the notice was issued, or 31 January.
With regard to late-filing penalties, HMRC have said that these will not be generated by their systems until after 31 January 2008. This allows them to determine the amount of the penalty, i.e. £100 or the amount of tax outstanding at 31 January, whichever is smaller.
The self-assessment statements issued from 24 February will therefore either show a penalty that is still outstanding, or a penalty that has been reduced to nil.
Enquiry centres no longer issue receipts for self assessment returns delivered by hand to local offices. However, in view of the legal deadlines for filing returns and consequences of delays, taxpayers and agents need evidence of delivery.
Following feedback from agents, HMRC have issued guidance to their staff that, if an agent challenges a penalty notice on the basis that the return had in fact been lodged, they should accept any reasonable evidence the agent has that the return was filed on time.
Experience over the past few years suggests that this has worked well and HMRC are happy to refresh that guidance for 31 October 2008.
To satisfy the requirement for reasonable evidence to be held by the agent, the professional bodies recommend the following:
- that each batch of returns to be hand delivered to HMRC should be accompanied by a list, date stamped for the relevant date of delivery, and listing the name and the unique taxpayer reference of each return in the batch;
- that each entry on the list should be checked back to the returns by a senior member of staff, and this individual should sign the list to indicate that this has been done;
- that in all firms other than sole practitioners, each list should then be checked and countersigned by, for example, a partner;
- that a sole practitioner should mark the items clearly as having been checked, and sign to this effect;
- that a copy of the list (signed and dated) should be retained in case of subsequent problems;
- that a copy of the signed and countersigned list should also be attached to each batch of returns handed in at HMRC enquiry centres.
HMRC confirm that the audit trail generated above will normally be accepted as reasonable evidence of delivery.
Security guards within HMRC buildings but not employed by the department are not permitted to take receipt of returns.
Where security guards are employed by HMRC, they are permitted to accept returns.
For relevant HMRC offices, see the dedicated page of the Revenue's website.
