[2011] UKFTT 486 (TC)
TC01333
Appeal number: TC/2009/13676
Construction
Industry Scheme - whether return deemed to be delivered in the ordinary course
of post - yes - whether return delivered late - no - appeal allowed
FIRST-TIER TRIBUNAL
TAX
MICHAEL
MCGILLEN
t/a MCGILLEN BUILDING SERVICES Appellant
-
and -
THE
COMMISSIONERS FOR HER MAJESTY’S
REVENUE
AND CUSTOMS Respondents
TRIBUNAL:
ANNE REDSTON (PRESIDING MEMBER)
The Tribunal determined the
appeal on 7 July 2011 without a hearing under the provisions of Rule 26 of the
Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (default
paper cases) having first read the Notice of Appeal dated 23 August 2009 and
HMRC’s Statement of Case submitted on 9 August 2009.
© CROWN COPYRIGHT
2011
DECISION
1. On
10 June 2009 the First-tier Tribunal decided the appeal of Mr Michael McGillen,
trading as McGillen Business Services, against the imposition of a £100 penalty
for late filing of the Company’s Construction Industry Scheme (“CIS”) return.
2. The
First-tier Tribunal found for HMRC, and Mr McGillen appealed to the Upper Tribunal.
3. On
1 June 2011, under powers given by s 12(2)(b)(i) and (3) of the Tribunals,
Courts and Enforcement Act 2007 (“the TCEA”), the Upper Tribunal remitted the
case back to the First-tier Tribunal for a rehearing before a different
Tribunal.
4.
Under TCEA s 12(3)(b), the Upper Tribunal may give procedural directions
in connection with the reconsideration of the case by the First-tier Tribunal.
In this case the Upper Tribunal has directed that this new Tribunal address the
following question on the basis of the evidence adduced to it by the parties:
“was the CIS return (due on 19 May
2009) posted on 12 May 2009, or in any event on a date when it could reasonably
have been expected to have reached the Respondents by 19 May 2009’
5. If
this Tribunal is satisfied that the answer is “Yes”, it is to allow the appeal;
otherwise the appeal is to be dismissed.
6. This
Tribunal finds that the answer to the question is “Yes”, and so allows the
Company’s appeal.
The
Appellant’s submissions
7. Mr
McGillen states that he posted the return with two first class stamps on 12 May
2009. He is clear that this was the date because he took a photocopy of the
return and marked the posting date on the return. A copy of this original return,
with the date of posting marked, was sent to HMRC by letter dated 12 June 2009
in support of his appeal against the filing penalty.
8.
In the same letter Mr McGillen explains why he wrote a copy of the
posting date on the return:
“there is either a problem with the post getting to you
or they are not dealt with immediately they arrive at your offices. We have
heard from you more than once in the past while I have always know that they
had been posted in adequate time to get you well before the 19th. In recent
months I have been putting the date they have been posted on the photocopies so
that I have evidence.”
9. Mr
McGillen further states that two witnesses saw him post the return on that day.
HMRC’s
submissions
10. HMRC say that the
return was submitted late. Instead of being received by 19 May 2009 it was not
received until 21 May 2009.
11. They also say McGillen
Building Services have appealed against three late filing penalties in the past
twelve months, and each of these have been upheld by HMRC – in other words,
HMRC have found in favour of the Appellant.
12. Since the last successful
appeal by Mr McGillen, HMRC have issued him with “an educational letter”, which
stated that “if further appeals against late filing penalties mention postal
delays, HMRC will require evidence of postage.”
13. HMRC contend
that Mr McGillen has not provided satisfactory evidence that the return was
posted on 12 May 2009 “ie a certificate of posting from the Post Office.”
When
was the return posted?
14. Mr McGillen has
kept a copy of his return, and recorded the date on which it was posted. He says
he adopted this practice because HMRC had previously incorrectly denied
receiving returns within the deadline.
15. HMRC’s own
evidence supports this – they say that the three times Mr McGillen has appealed
against a late filing penalty, they have each time conceded he was correct.
16. I place
considerable weight on Mr McGillen’s testimony, his history of being proved
correct in relation to previous filing dates, and the fact that he has introduced
a systemic practice to record his posting dates.
17. I place little
if any weight on the witnesses. The individuals are not named, and they have given
no evidence; even assuming that two people did see Mr McGillen post an
envelope, would they have known what was inside?
18. For their part, HMRC
state that the letter was received on 21 May 2009. However, this is a bare
assertion. They did not produce the CIS return, date stamped on arrival, or any
evidence as to their systems for recording post.
The
decision
19. Although I
discount the witness evidence, I nevertheless find, on the balance of
probabilities, that the letter was posted with two first class stamps, as Mr McGillen
says, on 14 June 2009.
20. I am reassured
in my decision by the fact that on three previous occasions, HMRC upheld Mr McGillen’s
appeal on similar facts: the reason that this appeal has been rejected by HMRC
appears to be that Mr McGillen has not complied with HMRC’s non-statutory
requirement that he produce a certificate of posting.
21. I therefore
decide the question posed by the Upper Tribunal in Mr McGillen’s favour.
22. This document
contains full findings of fact and reasons for the decision. Any party
dissatisfied with this decision has a right to apply for permission to appeal
against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal)
(Tax Chamber) Rules 2009. The application must be received by this Tribunal
not later than 56 days after this decision is sent to that party. The parties
are referred to “Guidance to accompany a Decision from the First-tier Tribunal
(Tax Chamber)” which accompanies and forms part of this decision notice.
Anne Redston
TRIBUNAL PRESIDING MEMBER
RELEASE DATE: 18 JULY 2011
