I was recently approached by a new client who had been charged penalties in excess of £5,000… an eye watering sum for anyone.

The first point to make is that the penalties were valid and had been raised correctly

What would you do in this situation?

If you had to pick a realistic number to reduce the penalties to, what would you settle for?

The specific circumstances of the case were considered and an appeal was submitted based on these. The appeal did not challenge the validity of the penalties. As mentioned they were perfectly valid and no error had been made by the tax office.

A different, unique, approach would have to be taken…

The result? All the penalties were cancelled, no payment was due!

As you would expect the client was incredibly happy and so was I. This was an excellent result in itself but it can also highlight an interesting point. For many their relationship with the tax office is that of an enemy. This can be fostered by a personal negative experience, comments and anecdotes from friends or even the attitude of their tax adviser.

Unfortunately, this attitude can make the situation worse, after all who wants to negotiate with an enemy? On the other hand, taking a balanced approach can see much better results as shown by this case.

This was a very happy outcome but a word of caution, do not take it as a reason for missing filing deadlines and incurring penalties, the exception should never be treated as the rule.

If you are faced with a similar situation or would like to discuss how I can help you with tax compliance, please do not hesitate to give me a call or send a message.