The next time you return from a trip abroad, you will be faced with a familiar choice; whether to follow the green (Nothing to Declare) or red lanes through Customs.
It is worth considering that this is one of the few reporting obligations to HMRC that does not require the submission of a form…
UK taxpayers face the same dilemma when they come to the end of a reporting period, say to submit a monthly CIS return, only to realise that in the past month no deductions were made.
Adopting the ‘Green Lane’ analogy, newcomers to the CIS reporting processes could be forgiven for thinking no return was required, after all, there is nothing to declare.
Older hands will smile and know differently.
Aside from the march through customs’ halls, a nil return requires that HMRC be notified in the usual way, by submitting an online or paper return.
Failure to file will result in a late filing penalty.
It is a sobering thought that HMRC will be enriched if taxpayers fail to tell them that no taxes are due.
Practitioners who manage clients’ filing obligations – PAYE, VAT, CIS et al – will be well aware of this issue. Hopefully, when clients elect to manage their own filing responsibilities, firms will tip them the wink, that if there is ever no liability, a return still needs to be made or penalties will be payable.
It is clear to see why nil returns are required, how would HMRC know there was no tax to pay unless they were informed?
Whilst a swift walk through the green customs lane may satisfy custom’s staff – in most cases – the majority of HMRC checks will require the submission of a form or online return even when there is nothing to declare.