Late P11D penalty warning despite submission on time?

A client yesterday received an HMRC warning letter headed 'P11D(b) interim penalty letter' and, in big, bold letters, 'Outstanding expenses and benefits forms P11D and P11D(b): you need to act'.  It goes on to say that HMRC had written in June to remind the client of the 6 July P11D deadline and warning of a penalty. Then: "We are writing to all employer and their agents who have not submitted returns ..."

The client was angry that his P11Ds had not been submitted, so he called.  They had gone in, and they had been acknowledged, but HMRC had sent the letter anyway.

If the client had continued reading, the letter said lower down 'If you have already filed ... thank you. Please ignore this letter.'  But he didn't get that far before he saw red.

It took a member of staff about an hour to deal with (pacify) the client, check the files, speak to HMRC to get to the bottom of it and give the story to the client.  A total waste of time for all concerned.

HMRC told us that they won't have logged all the P11Ds until late August, so it doesn't know yet who has submitted and who hasn't.  This presumably means that the letter was simply sent to everyone who was expected to submit, as a reminder of the penalty for late filing.  This is understandable, given the timescales for logging and contacting employers, but the wording chosen was very poor.

Knowing that they were writing to everyone, including the compliant (who will now be totally hacked off), why didn't the letter start with "Please ignore this letter if you have submitted all your P11Ds"?  In big, bold letters?  

After all the effort that went into agreeing a good P35 warning letter this year, it is frustrating and disappointing to receive such an ill-thought-out, unnecessary warning that has wasted so much time.

It would be interesting to know how many others have had the same problem with an irate client.  A local practitioner emailed me this morning about six cases in her practice alone.  It wasn't just her clients' blood that was boiling.
  • Are HMRC sending these letters to ALL employers who are expected to file P11Ds or only to those who file P11Ds in paper form? If the former then that is a huge waste of postage cost.
  • The letter says "We are writing to all employers and their agents who have not submitted their returns in case you now realise returns are due". 

    The letters I've seen have come from cases where returns have been filed on paper, but the letter itself goes on to say "If you have already filed online ... please ignore this letter", so somebody at HMRC expects it to be going to people who have e-filed as well as the paper filers.

    Maybe the extra postage cost was seen as a small price to pay for ensuring that nobody could claim before a tribunal that they hadn't been warned of the late filing penalty?  Any appeal soaks up manpower, and there have been lots, nearly all unsuccessful so far, over late PAYE penalties.
  • We received the same letter on two clients on the same day.  They are associated companies and the P11Ds & P11Dbs were submitted for both companies in the same envelope on 30 May 2012.  Interestingly HMRC issued new coding notices on 27 June 2012 (which are clearly based on the submitted P11Ds as they contained some very specific amounts that HMRC could not otherwise have known about).  The letter from HMRC is dated 23 July 2012 so they cannot even use the excuse that there is a processing backlog.
    We dealt with it and advised the client before even the client was aware of it.  I have submitted our invoice to HMRC for the time unnecessarily incurred.
    If HMRC are going to use automated systems for their draconian penalties they need to get their systems sorted out first rather than putting everyone else to the trouble of resolving problems that HMRC have created.
  • How wide spread is the erroneous late P11D penalty problem this year?  What its the pracitcal advice for dealign with the interium penalty notices? - Ignore them?