HMRC ATED penalties warning?

I recently changed accountants and discovered that my previous accountant had not filed any of the required Annual Tax on Enveloped Dwellings (ATED) returns on behalf of my company. As a result, I have been issued with penalties totalling approximately £5,270.

As a business owner, you naturally rely on your accountant to ensure that your tax and reporting obligations are being dealt with correctly. However, my experience has highlighted the importance of property owners and developers keeping an eye on their own compliance and not relying entirely on their accountant.

A genuine administrative mistake can potentially cost thousands of pounds. In my case, the properties qualified for the relevant ATED reliefs, so there was no ATED tax actually payable. Nevertheless, the failure to submit the required returns resulted in significant penalties.

HMRC generally does not accept simply relying on an accountant, or being unaware of a filing requirement, as a reasonable excuse for late filing. This is something that I believe should be brought to the attention of all landlords and property developers, particularly those who own properties through companies.

I am currently appealing the penalties and requesting a special review of my circumstances under Schedule 55 of the Finance Act 2009, with the aim of having the penalties reduced or cancelled.

Whatever the outcome of my appeal, I believe this is an important warning to other landlords and property developers:

Do not simply assume that your accountant has dealt with everything. Make sure you understand your own filing obligations, check that returns have actually been submitted, and keep your own records of important tax deadlines.

A genuine mistake or missed filing deadline can potentially result in penalties running into thousands of pounds, even where no tax is actually payable.

Sandeep