Tribunal – late submission of P35
The First-tier Tribunal recently heard a taxpayer’s appeal against penalties for late submission of the Employer Annual Return – P35 for the tax year ended 5 April 2013. The P35 should have been filed by 19 May 2013 but was ultimately filed on 17 September 2013.
The taxpayer in the case owned two further businesses and the bookkeeper filed the returns for all three businesses at the same time and in the same way. The problem with the business that was the subject of the appeal appeared to start when the business was incorporated.
The taxpayer produced telephone records which showed that ten calls had been made to HMRC from the business landline lasting 142 minutes in total as well as other calls made by the bookkeeper from personal numbers to discuss the submission of the Annual Return. HMRC argued that the submission of the returns for other two businesses was irrelevant and that they had received only one phone call from the appellant.
The Tribunal remarked that HMRC’s attitude in this case was troubling and the taxpayer’s appeal was allowed. The Tribunal Judge commented that‘I find that the appellants have in all the circumstances established that on the balance of probabilities they have a reasonable excuse for non- payment of the penalties.’
Most employers are now using RTI and are no longer required to file an Employer Annual Return. However, employers, where HMRC has agreed that they can send their PAYE information on paper, should be aware that the deadline for submitting the Employer Annual Return for 2013/14 is 19 May 2014.