Chapter CH175230
| Published date | 11 March 2016 |
| Record Number | CH175230 |
| Court | HM Revenue & Customs |
| Issuer | HM Revenue & Customs |
This page gives additional detail for review officers and appeals teams.
Comments in the following First Tier Tribunal (FTT) judgment extracts are not binding on HMRC (except in so far as they relate to the appeal that was decided). However, they do support HMRC’s views on the meaning and application of special reduction penalty law. They may be persuasive if quoted in relation to other appeals, but it is always important to remember that they represent findings made on the precise facts of the individual appeals decided by the FTT.
Dina Foods Limited (TC 01546) - FA 2009 schedule 56 late payment penaltyAt paragraph 9 the FTT said:
‘The Tribunal can only rely upon the “special circumstances” provision in para 9 to a different extent than that applied by HMRC if it thinks that HMRC’s decision in that respect was flawed. Applying judicial review principles, the Tribunal must consider whether HMRC acted in a way that no reasonable body of commissioners could have acted, or whether they took into account some irrelevant matter or disregarded something to which they should have given weight. The Tribunal should also consider whether HMRC have erred on a point of law.’
At paragraph 31 the FTT said:
‘The legislation on PAYE penalties is clear. As we have described, except in the case of special circumstances, the scheme laid down by the statute gives no discretion: the rate of penalty is simply driven by the number of PAYE late payments in the tax year by the employer. A company that makes 11 late payments in the year will fall into the 4% penalty rate.’
At paragraphs 33-34 and 38-39 the FTT said:
‘33. The scheme of the PAYE legislation requires taxpayers to pay over PAYE on time. The legislation does not require HMRC to issue warnings to individual employers, though it would be expected that a responsible tax authority would issue general material about the new system. This HMRC did; in our view, the absence of specific warnings to Dina Foods Ltd about the consequences of failing to pay on time does not constitute a reasonable excuse for any of the late payments.
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With respect to Mr Kaye’s argument on the lack of any warning from HMRC that the penalty was building up, the comparison he drew with the VAT Default Surcharge system may be apt, but only in the sense that both seek to encourage a taxpayer to pay on time and penalise him if he does not. However, the comparison only goes so far. Parliament decided on a different system for PAYE, possibly...
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