[2012] UKFTT 233 (TC)
TC01927
Appeal number: TC/2011/06760
Income
tax return—Penalty for late return (Taxes Management Act 1970 s.93(2))—Reasonable
excuse—Appeal allowed
FIRST-TIER TRIBUNAL
TAX
MR
JOHN BENTLEY Appellant
-
and -
THE
COMMISSIONERS FOR HER MAJESTY’S
REVENUE
AND CUSTOMS Respondents
TRIBUNAL:
Dr Christopher Staker (Tribunal Judge)
The Tribunal determined the
appeal on 24 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 dated 27 August 2011, HMRC’s
Statement of Case dated 14 October 2011, and other papers in the case.
© CROWN COPYRIGHT
2012
DECISION
1. The
Appellant appeals against a penalty of £93.49 imposed in respect of the late
filing of his income tax return for the tax year 2009/10. The penalty for late
filing of a return is normally £100, but the penalty in this case has been
capped at the amount of actual tax liability for the year.
2. The
Appellant apparently 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. It appears to be common ground that the
deadline for filing was 31 January 2011, and that the return was filed on 3
February 2011, such that it was 3 days late.
3. The
Appellant’s case is as follows. He has paid his taxes on time all his working
life. He is an old age pensioner living purely from his pension. His tax
returns have always been completed by his accountant and this was the first
year that he had to handle them himself due to rising living costs and decline
in his financial status. He did not for one minute think that there would be a
problem in attending the HMRC office on 31 January 2011 in order to complete
the return. He chose to attend in person, to make sure that it was completed
correctly with the help of the staff, thus eliminating any errors. He cannot
afford the fine.
4. The
Appellant therefore in substance pins his case solely on the contention that he
has a reasonable excuse for the late filing.
5. 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.
6. 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.
7. 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.
8. The
HMRC statement of case states by way of response to the Appellant’s notice of
appeal amongst other matters as follows. The Appellant’s excuse appears to be
that he could not complete his tax return by 31 January 2011 because he was
unable to make an appointment at the local HMRC enquiry centre on 31 January
2011 and could only be accommodated on the next available date of 3 February
2011. However, a prudent taxpayer would have appreciated that such
appointments, especially on the filing deadline of 31 January would be
pre-booked and therefore unobtainable at short notice on one of HMRC’s busiest
days. The Appellant should have acted sooner and made the necessary
arrangements at an earlier date.
9. As
stated above, the burden is on the appellant to prove, on a balance of
probability, the existence of circumstances amounting to a reasonable excuse. Although
it is not clear, it appears implicit from the HMRC submissions that the local
HMRC enquiry centre does offer a service by which taxpayers can attend in
person and file their tax return at the office with the assistance of HMRC
staff. Although HMRC contends that a prudent taxpayer would have appreciated
that an appointment on 31 January would unobtainable at short notice, there is
no evidence about what publicity material is issued by HMRC in relation to this
service, or what advice is given about how far in advance appointments need to
be booked. It is unclear when the Appellant sought to make the appointment.
However, it does not appear to be in dispute that he did, prior to the
deadline, seek to make an appointment, and that he did take the first available
appointment which was on 3 February 2011, and that he did file the return on
that date. The Tribunal is satisfied on the evidence that he would have
accepted an appointment and have filed the return by 31 January 2011 if an
appointment had been available on or before that date. The return was thus 3
days late, due not to his own conduct but due to HMRC’s unavailability.
10. It may well the
that the Appellant would be precluded from invoking a reasonable excuse if he
sought to make an appointment at much shorter notice than HMRC publicity
material indicated was the requisite notice period. However, there is no
evidence of when the request for an appointment was made, or of what would have
been an appropriate notice period. On the very limited evidence before the
Tribunal in this case, it is unable to conclude that the Appellant acted
unreasonably in not trying to make an appointment earlier, or in waiting for
such an appointment before filing the return. On the limited evidence
provided, the Tribunal is satisfied that there is a reasonable excuse for the
late filing.
11. It follows that
this appeal is allowed.
12. 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
