A landlord has been fined £1,600 by HMRC – despite not owing any tax. Mohammad Muhsen Yaqoobi has been issued a brutal fine by the taxman and government tax department after he failed to complete his 2020 to 2021 tax return on time.
He appealed the fine but in December had his case thrown out by the First Tier Tribunal. The Tribunal found he did not have a “reasonable excuse” for filing late despite Mr Yaqoobi, who lived in London earning a small income from a property he was renting out, owing no tax.
He made £11,500 in rental income – below the personal allowance, which at the time was £12,500 – in 2021 to 2022. He moved to Jordan in 2021 but HMRC found him liable despite living overseas.
He was fined by HMRC for submitting his return 375 days late. “A diligent taxpayer would have put arrangements in place before he left the UK to ensure that his tax affairs were dealt with while he was abroad,” the judges said.
Claire Roberts, of accountancy firm Moore Kingston Smith, said: “HMRC has become increasingly unsympathetic towards taxpayers who claim to be unaware of their tax filing obligations – even when there’s nothing to pay. With the January 31 tax return deadline almost upon us, this case is a salutary reminder to taxpayers: check and double check if you need to file a tax return. Even if there is no tax liability, failure to file on time could prove costly.”
Dan Neidle, of the think tank Tax Policy Associates, said: “Nobody filing late should be required to pay a penalty that exceeds the tax they owe.” An HMRC spokesman said: “We don’t want to collect penalties – our aim is to support taxpayers to get their tax right and avoid fines altogether.
“We issue notices to everyone we believe needs to file a return and the vast majority file on time. It’s crucial that people tell us if they no longer need to do this.”
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