Late payment penalty - No employees


S

SteveN

My one man band Co has been hit with a fine for failing to make it's
employer annual return on time, currently £800 and rising, long story..

As said company has not traded for a few years, and no wages have been
drawn, is the company still liable as there is no tax to pay ?


Tia,

Steve.
 
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P

PeterSaxton

My one man band Co has been hit with a fine for failing to make it's
employer annual return on time, currently £800 and rising, long story..

As said company has not traded for a few years, and no wages have been
drawn, is the company still liable as there is no tax to pay ?

Tia,

Steve.
It doesn't make any difference if there was no tax to pay.

Were you asked to submit a P35?

Had you told HMRC that you had no employees?
 
N

neverwas

<snip good advice>

Bear in mind also that for PAYE purposes an office-holder is
an employee, and a company's director is an office-holder.
So if your company has even one director then HMRC can
argue, I think correctly, it has an employee for PAYE
purposes.
 
P

PeterSaxton

<snip good advice>

Bear in mind also that for PAYE purposes an office-holder is
an employee, and a company's director is an office-holder.
So if your company has even one director then HMRC can
argue, I think correctly, it has an employee for PAYE
purposes.
If there are no payments or benefits then there is no PAYE.
 
N

neverwas

PeterSaxton said:
If there are no payments or benefits then there is no
PAYE.
Yes in the sense that there is no PAYE to deduct and account
for if there are no payments.

But regulation 73 (unless it's been amended) requires a P35
from an employer. It doesn't say "if there is any PAYE" or
"if you have made payments". So there used to be an
expectation of "nil returns" and many employers used to make
them in practice (typically for dormant companies). And
there are HMRC instructions for how to process them. See eg
http://www.hmrc.gov.uk/manuals/pommanual/paye43031.htm

That said, the OP said it is a long story and I suspect
there is more than just a simple failure to make one nil
return involved.
 
P

PeterSaxton

Yes in the sense that there is no PAYE to deduct and account
for if there are no payments.

But regulation 73 (unless it's been amended) requires a P35
from an employer.  It doesn't say "if there is any PAYE" or
"if you have made payments".  So there used to be an
expectation of "nil returns" and many employers used to make
them in practice (typically for dormant companies).  And
there are HMRC instructions for how to process them. See eghttp://www.hmrc..gov.uk/manuals/pommanual/paye43031.htm

That said, the OP said it is a long story and I suspect
there is more than just a simple failure to make one nil
return involved.
If you tell HMRC that the company has stopped employing anyone and
HMRC doesn't send a P35 then you shouldn't have to submit one. I have
an ex-client who died and he was the sole employee of the company
which has been wound up. Despite telling HMRC on phone and in writing
several times a few years later HMRC are still sending P35s.
 
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S

SteveN

If you tell HMRC that the company has stopped employing anyone and
HMRC doesn't send a P35 then you shouldn't have to submit one. I have
an ex-client who died and he was the sole employee of the company
which has been wound up. Despite telling HMRC on phone and in writing
several times a few years later HMRC are still sending P35s.
Thanks for your input folks, but I'm still non the wiser.

The Co has not traded for a few years, I should have laid it to rest, I
just submit my annual accounts and get a "nothing to pay" in return.

I do get sent P35 even though I have previously informed the IR that no-
one draws a salary.

I missed the deadline for filling in a P35 for years 06-07, hence the
fine.

My question is if there's no tax to pay can the IR still fine me close on
£1000 ?

Tia,

Steve..
 
J

Jon Griffey

SteveN said:
Thanks for your input folks, but I'm still non the wiser.

The Co has not traded for a few years, I should have laid it to rest, I
just submit my annual accounts and get a "nothing to pay" in return.

I do get sent P35 even though I have previously informed the IR that no-
one draws a salary.

I missed the deadline for filling in a P35 for years 06-07, hence the
fine.

My question is if there's no tax to pay can the IR still fine me close on
£1000 ?

Tia,

Steve..

Try appealing formally on the grounds that no payroll was operated
during the year in question and as such no P35 was due. You could also
refer to the fact that HMRC were told previously, and enclose copies of
the correspondence.

FWIW I have succeeded with this approach a number of times.

Give it a try, and if successful you can buy me a nice cold beer.

Good luck!
--
Jon Griffey FCCA CTA
Hackett Griffey
Chartered Certified Accountants & Registered Auditors
2 Mill Road, Haverhill, Suffolk, CB9 8BD

Tel (01440) 762024

www.hackettgriffey.com

See www.hackettgriffey.com/pages/legal.html for disclaimers
 
M

Martin

Thanks for your input folks, but I'm still non the wiser.

The Co has not traded for a few years, I should have laid it to rest, I
just submit my annual accounts and get a "nothing to pay" in return.

I do get sent P35 even though I have previously informed the IR that no-
one draws a salary.

I missed the deadline for filling in a P35 for years 06-07, hence the
fine.

My question is if there's no tax to pay can the IR still fine me close on
£1000 ?

Tia,

Steve..
You are only req'd to submit a P35 if you have also been req'd to complete
at least one P11 in the year. Assuming you had no employees in 06-07, hence
no P11, you do not need to submit a P35.

HMRC advice is to notify them if a P35 is requested but no P35 is being
submitted. This you have done, hence no penalty is due.

If you did have to submit a P35, but did so late (or not at all) the
penalties are not reduced just because there is no (or little) tax unpaid
(or paid late). This is in contrast to SATR, where the penalty is min of
unpaid tax (or tax paid late) and £100.

So I would write and tell them you have had no employees since the last time
you told them ... and that they should withdraw the penalty notice.

Incidentally, AIUI the penalty is £100 a month - so your initial comment
about "£800 and rising" is probably now "£1100 and rising"... :))

HTH
 
P

PeterSaxton

Thanks for your input folks, but I'm still non the wiser.
You should be. I said "It doesn't make any difference if there was no
tax to pay. "
The Co has not traded for a few years, I should have laid it to rest, I
just submit my annual accounts and get a "nothing to pay" in return.
Inform HMRC that the company is dormant. You will only get bothered
about once every five years then.
I do get sent P35 even though I have previously informed the IR that no-
one draws a salary.

I missed the deadline for filling in a P35 for years 06-07, hence the
fine.

My question is if there's no tax to pay can the IR still fine me close on
£1000 ?
As I said early, it doesn't matter whether there is any tax to pay -
you can still get fined. Similarly with corporation tax. This is
another reason why it is best to ak HMRC to stop insisting on a tax
return.

You've told them you don't have any employees so you shouldn't have to
complete a P35 therefore no penalty is valid.
 
S

SteveN

Try appealing formally on the grounds that no payroll was operated
during the year in question and as such no P35 was due. You could also
refer to the fact that HMRC were told previously, and enclose copies of
the correspondence.

FWIW I have succeeded with this approach a number of times.

Give it a try, and if successful you can buy me a nice cold beer.

Good luck!
Thanks, appeal sent off per your guidance..

Happily stand you a beer if it come off :)
 
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S

SteveN

If you did have to submit a P35, but did so late (or not at all) the
penalties are not reduced just because there is no (or little) tax
unpaid (or paid late). This is in contrast to SATR, where the penalty
is min of unpaid tax (or tax paid late) and £100.
And there endeth the lesson :((
So I would write and tell them you have had no employees since the
last time you told them ... and that they should withdraw the penalty
notice.
Cheers, job done
Incidentally, AIUI the penalty is £100 a month - so your initial
comment about "£800 and rising" is probably now "£1100 and rising"...
:))

HTH
Don't I know it..
 
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S

SteveN

You should be. I said "It doesn't make any difference if there was no
tax to pay. "
Sorry, missed that bit :(
Inform HMRC that the company is dormant. You will only get bothered
about once every five years then.


As I said early, it doesn't matter whether there is any tax to pay -
you can still get fined. Similarly with corporation tax. This is
another reason why it is best to ak HMRC to stop insisting on a tax
return.

You've told them you don't have any employees so you shouldn't have to
complete a P35 therefore no penalty is valid.
Hope so but not holding my breath..
 

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