[2012] UKFTT 232 (TC)
TC01926
Appeal number: TC/2011/06907
Income
tax return—Penalty for late return (Taxes Management Act 1970 s.93(2))—Reasonable
excuse—Appeal dismissed
FIRST-TIER TRIBUNAL
TAX
MR
PHILIP MAHER Appellant
-
and -
THE
COMMISSIONERS FOR HER MAJESTY’S
REVENUE
AND CUSTOMS Respondents
TRIBUNAL:
Dr Christopher Staker (Tribunal Judge)
The Tribunal determined the
appeal on 20 January 2012 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 filed 11 August 2011, HMRC’s
Statement of Case dated 12 October 2011, and other papers in the case.
© CROWN COPYRIGHT
2012
DECISION
1. The
Appellant appeals against a penalty of £100 imposed in respect of the late
filing of his income tax return for the tax year 2009/10.
2. The
Appellant does not dispute that the tax return was filed late, and does not
suggest that he would not be liable to the penalty if he had no reasonable
excuse for the late filing.
3. The
Appellant’s case is stated in his notice of appeal as follows: “HMRC’s
computer system failed to work—Pin numbers never worked could not get on to the
system even after phoning them and getting new pin numbers that never worked
either”.
4. The
same contention is made in an undated letter from the Appellant to HMRC,
included as folio 5 of the HMRC statement of case bundle, which states: “I was
unable to use your online system to do my tax return as it would not let me use
the Pin numbers I got off you”.
5. The
Appellant therefore in substance pins his case solely on the contention that he
has a reasonable excuse for the late filing.
6. Section
93(1) and (2) of the Taxes Management Act 1970 (the “TMA”) provides for a £100
penalty for the late filing of a tax return. However, section 93(8) of the TMA
provides that on appeal to the Tribunal against such a penalty, the Tribunal
may:
(a) if it appears that,
throughout the period of default, the taxpayer had a reasonable excuse for not
delivering the return, set the determination aside; or
(b) if it does not so appear, confirm the determination.
7. Section
118(2) of the TMA additionally provides as follows:
For the purposes of this Act, a person shall be deemed not
to have failed to do anything required to be done within a limited time if he
did it within such further time, if any, as the Board or the tribunal or
officer concerned may have allowed; and where a person had a reasonable excuse
for not doing anything required to be done he shall be deemed not to have
failed to do it unless the excuse ceased and, after the excuse ceased, he shall
be deemed not to have failed to do it if he did it without unreasonable delay
after the excuse had ceased.
8. In
any appeal to the Tribunal against a late filing penalty, in which an appellant
claims to have a reasonable excuse for the late filing, the burden of proof is
on the appellant to prove, on a balance of probability, the existence of the
circumstances amounting to a reasonable excuse.
9. The
HMRC statement of case states by way of response to the Appellant’s notice of
appeal amongst other matters as follows. In order to use the HMRC online
system to file a tax return, it is necessary for a user to register for the
service first. Once a person has registered, HMRC sends the person by post a
unique activation PIN. The system also provides the user with a user ID and
asks for personal details and a password. The activation PIN has a lifespan of
28 days, and if not activated within this period a new one must be applied
for. Once the account is activated, the activation PIN is no longer required.
Once activated, the user ID and password are used to access the service. As a
security precaution, if the activation code is entered incorrectly three times,
the service enrolment is removed, and it is necessary for the customer to
re-enrol and another activation PIN is sent. HMRC provides information in the
public domain about how the system works.
10. The HMRC
statement of case further states as follows. The Appellant requested an
activation code on 25 January 2011, which would have been issued within a
number of days. HMRC records show that there was no enrolment within 28 days.
HMRC records show that the Appellant contacted the self-assessment helpline on
27 January 2011 regarding difficulties with the online filing, and that the
Appellant was given the Electronic Business Unit/Online services helpline number.
HMRC have no record of a call made to that unit regarding the difficulties
encountered. The Appellant did not make further contact with HMRC about the
matter until 9 May 2011, although he must have been aware the whole time that
his tax return had still not been submitted.
11. The Tribunal considers
that on the information provided by HMRC, it does appear, first, that the
Appellant made efforts to file his return on time, albeit quite close to the
deadline, and secondly, that he experienced problems when trying to use the
online service. According to the HMRC information, he requested an activation
code on 25 January 2011, and contacted the self-assessment helpline on 27
January 2011 stating that he was having difficulties with the online filing.
12. However, there
are two points in the HMRC statement of case that are important. The first is
the claim by HMRC that in the telephone call to the self-assessment helpline on
27 January 2011, the Appellant was given the telephone number of the Electronic
Business Unit/Online services helpline, yet according to HMRC records, he never
contacted this helpline. The second is the point that although the Appellant
knew he was having difficulties, and must have known that his return had still
not been filed, he did not make contact with HMRC again until 9 May 2011.
13. By a letter
dated 20 October 2011, a copy of the HMRC statement of case was sent to the
Appellant under cover of a letter from the Courts and Tribunals Service,
informing him that he was entitled to reply to the HMRC statement of case
within 30 days, and advising him to “ensure that you have sent all relevant
documents to the Tribunal that you wish to be considered”. Nothing further was
received from the Appellant.
14. As stated above,
the burden of proof is on the appellant to prove, on a balance of probability,
the existence of the circumstances amounting to a reasonable excuse. It is
very unclear from the brief statement in the Appellant’s notice of appeal
exactly what was the nature and cause of the problem he was encountering in
using the online system, other than that it related to PIN numbers not
working. The points raised in the HMRC statement of case have been met with no
response from the Appellant. The Tribunal is simply unable to conclude on the
information available to it that the Appellant was exercising reasonable due
diligence to ensure that his tax return was filed on time, or that there are
circumstances amounting to a reasonable excuse.
15. It follows that
this appeal must be dismissed.
16. 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.
DR CHRISTOPHER STAKER
TRIBUNAL JUDGE
RELEASE DATE: 02 April 2012
