It has said that if it concludes that further legislation is appropriate, there will be a consultation process. In the meantime as far as we know, ESC A81 has not been formally withdrawn, so HMRC will continue to operate the treatment available under ESC A81 during this interim period. ESC A81 remains available as a means of claiming the tax exemption in respect of COT3 and other settlement agreements. I would be really grateful if you could get to the bottom of this and confirm the current position.” HMRC Answer: “We are discussing the issue with relevant policy stakeholders to assess whether Section 413A has unintended consequences of excluding agreements that would have been covered by the concession and whether further legislation may be required. If we conclude that further legislation is appropriate we will consult via the normal routes. The concession at A81 has not formally been withdrawn so HMRC will continue to operate the treatment available under the concession during this interim period. We will provide a further update in due course.” 8 June 2011 A company was fined £400 for late filing as they accidentally submitted a test P35 twice. The company appealed against the penalty and the tribunal ruled that the email confirmation, which is the same whether a test or live submission, could not be used as a ‘reasonable excuse’. According to HMRC's records both the 31 March, 2010 and the 9 April, 2010 submissions were "test" submissions. The appellant was not notified of the error until the September by which time four months of penalties had accrued. The First-tier Tax Tribunal ruled that the confirmation email, which is sent to an employer after filing PAYE year-end Returns online and has the same wording for both live and test submissions, cannot be relied on as confirmation that the Return has been successfully filed. HMRC stated in the case that the online response to their software is legal receipt; the e-mail confirmation is just a courtesy to assist customers. The wording of the email is as follows: “Thank you for sending the PAYE End of Year submission online. The submission for reference ………. was successfully received on ………….. If this was a test transmission, remember you still need to send your actual Employer Annual Return using the live transmission in order for it to be processed.” The appellant drew the courts attention to the fact that they were not notified until four months after the year-end return deadline and so the accrued penalties were unfair. The court responded: “We have some sympathy for this submission. If the online return (Form P35) is filed unsuccessfully, for whatever reason, the taxpayer may not be aware of the default until notified several months later by HMRC (in this case on 27 September, 2010) when a penalty notice is issued. Since the penalty is time-based (£100 per month) the notification is made at a time when a significant amount of penalties has already accrued. We have no jurisdiction to interfere (our jurisdiction is limited by section 100B TMA), but wish to record that the system does not seem to operate satisfactorily and the taxpayer should be notified at an earlier stage that Form P35 has not been filed by the due date and that a first month penalty has been incurred. It may well be that a "9001" response is sent but we think a more formal notification would be desirable.” ACCIDENTAL TEST SUBMISSION OF P35 NOT A REASONABLE EXCUSE
CIPP Policy News Journal
09/10/2012, Page 35 of 234
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