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HMRC internal manual

Self Assessment Manual

From
HM Revenue & Customs
Updated
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Interest, penalties and surcharge: penalties: deceased cases

Customer dies before the filing date

Where a customer has been served with a notice to file a return and fails to comply, and dies before the filing date, then you should cancel any late filing penalty imposed under FA2009 Schedule 55. This is because we cannot show that the person on whom the notice was served has incurred any penalty because he or she died before it became due.

When notified of the death of a customer you will need to take the necessary actions as shown within subject ‘Permanent cessation: deceased cases’ at SAM90010.

You must also

  • Cancel any penalties raised using function VIEW/CANCEL PENALTIES
  • Issue a new return to the personal representative
  • Record the date of issue on the SA record

Note: There may be more than one penalty raised because the tax return is late, for example late filing fixed penalty, late filing daily penalty and late filing (tax geared) penalties. In these cases, cancel each penalty separately.

The filing date of the new return is the later of

  • 31 October following the end of the return year

Or

  • Three months and seven days from the date of issue

Any new penalties will then be based on the revised filing date.

Note: If a penalty was previously cancelled, the system will not automatically create a new penalty so you should do this clerically. For more information, see SAM61280.

If the new return issued to the personal representatives is received late, clerically calculate what penalties are due. You should calculate each penalty charge individually and create separate miscellaneous penalty charges using function CREATE SUNDRY CHARGE. Note: You may also need to consider manually issuing daily penalty reminders if daily penalties are accruing and a notice of penalty assessment has not been issued.

More information about late filing fixed penalties, late filing daily penalties and late filing tax geared penalties can be found at SAM61200 onwards.

Customer dies shortly after the filing date

Where the customer dies shortly after the filing date, any penalties imposed are correctly charged. However, you should normally accept an appeal from the personal representatives and cancel the penalty. You should

  • Cancel any penalties raised using function VIEW/CANCEL PENALTIES
  • Issue a new return to the personal representative
  • Record the date of issue on the SA record

Again, any late filing penalties are then based on the new return, and each penalty charge should be calculated individually, then entered onto the record by creating separate miscellaneous penalty charges using function CREATE SUNDRY CHARGE.