JurisdictionUK Non-devolved
Judgment Date28 June 2019
Date28 June 2019
CourtFirst Tier Tribunal (Tax Chamber)

[2019] UKFTT 424 (TC)

Judge James Austen


Income tax – Self assessment – Late filing penalties – FA 2009, Sch. 55 – Requirements of TMA 1970, s. 8(1) – Burden of proof – Inferences of fact – Platt [2019] TC 07131 and Qureshi [2018] TC 06372 considered – Edwards v R & C Commrs [2019] BTC 516 applied – HMRC failed to prove necessary fact pleaded – Reasonable excuse – Yes – Special circumstances – No – Appeal allowed.

The First-tier Tribunal (FTT) allowed a taxpayer's appeal against late filing penalties. HMRC's return summary printout was not enough to prove that a notice to file had been issued and therefore no late filing penalties could be charged.


Mrs Griffiths (the appellant) appealed against late filing penalties issued under FA 2009, Sch. 55 in respect of her 2016–17 personal tax return.

On the issue of whether HMRC had proved that a notice to file a return had been issued under TMA 1970, s. 8, the FTT considered Platt [2019] TC 07131 and Qureshi [2018] TC 06372 and applied Edwards v R & C Commrs [2019] BTC 516. The FTT did not accept that HMRC's return summary printout and/or HMRC's submission that a notice to file a return had been issued, proved on the balance of probability that a valid notice to file had been issued. Nor could it presume or infer on the balance of probabilities the existence of a valid notice to file from the evidence presented: to do so would have been to speculate rather than to draw a proper judicial inference from a primary fact. In particular, the lack of evidence as to HMRC's systems and processes made it impossible for the FTT to infer that those systems and processes were such as to make it more likely than not that a valid notice to file was sent to the appellant. It followed that the FTT was unable to conclude that the appellant had an obligation to file a tax return for that year. Her appeal therefore had to be allowed in full and the penalties set aside.

In case that decision was wrong the FTT also considered the issue of reasonable excuse under FA 2009, Sch. 55, para. 23 and special circumstances under para. 16.

The FTT accepted that the appellant did have a reasonable excuse, with the salient reasons being:

  • The lack of information available to her about her financial and tax affairs given that this information was controlled by her estranged husband (H) and that the accountants would not release details to her.
  • The fact that she had taken significant steps to obtain the information from H and from the accountants.
  • The fact that as a result of the breakdown of her marriage, her separation and estrangement from H – and the dire financial consequences for her as a result – she had no funds to pay a penalty.

The FTT also found that were it to have had complete freedom on the special circumstances point, it would have held that because of the circumstances of the appellant's divorce and H's reported conduct, there were special circumstances which merited reducing the penalties to zero. However, as it could only overturn HMRC's decision on this point if it concluded that it was a decision that no reasonable person could have reached upon consideration of the relevant matters, it would not go that far. It considered that HMRC's decision that there were no special circumstances, whilst harsh, was one that a tax authority could reasonably take. It therefore concluded for the purposes of the appeal that there were no special circumstances.


This case serves as a reminder that in a penalty appeal the initial burden lies on HMRC to establish that events have occurred as a result of which a penalty is, prima facie, due. And that this must be established through proper evidence and not simply by HMRC asserting this to be the case.


[1] This is an appeal by Mrs Angela May Griffiths (“the appellant”) against the following penalties:

  • £100 imposed under paragraph 3 of Schedule 55 Finance Act 2009 (FA09) for the late filing of the Individual Tax Return for the year ending 5 April 2017;
  • Daily penalties, totalling £900, imposed under paragraph 4 of Schedule 55 of FA09 for failing to file the Individual Tax Return for the year ending 5 April 2017 within three months of its due date; and
  • £300 imposed under paragraph 5 of Schedule 55 of FA09 for failing to file the Individual Tax Return for the year ending 5 April 2017 within six months of its due date.

[2] I allow the appeal and set aside the penalties for the reasons set out below.

Preliminary issue: s.8(1) Taxes Management Act 1970 (“TMA 1970”)

[3] Sub-section 8(1) TMA 1970 provides as follows:

8 Return of income

(1) Any person may be required by a notice given to him by an inspector or other officer of the Board to deliver to the officer within the time limited by the notice a return of his income, computed in accordance with the Income Tax Acts and specifying each separate source of income and the amount from each source.

[4] (Subject to other provisions of that Act not relevant here,) it follows that no obligation arises on a person to submit a self-assessment Individual Tax Return absent such a notice. Section 115 TMA 1970 specifies the requirements for delivery and service of documents under the Taxes Acts:

115 Delivery and service of documents

(1) A notice or form which is to be served under the Taxes Acts on a person may be either delivered to him or left at his usual or last known place of residence.

(2) Any notice or other document to be given, sent, served or delivered under the Taxes Acts may be served by post, and, if to be given, sent, served or delivered to or on any person by the Board, by any officer of the Board, or by or on behalf of any body of Commissioners, may be so served addressed to that person–

  • at his usual or last known place of residence, or his place of business or employment …

(3) In subsection (2) above “prescribed” means prescribed by regulations made by the Board, and the power of making regulations for the purposes of that subsection shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons …

[5] HRMC alleges in its Paper Hearing Submission that a notice to file a return (under s.8(1) TMA 1970) was issued to the appellant on 6 April 2017, in support of which it provides a printout of a computer record for the appellant entitled “Return Summary”. A printout of a second page is provided to indicate the address which HMRC had on file for the appellant as at 5 April 2017. HMRC adduces no further evidence to show valid delivery of the notice to file pursuant to the requirements of ss.8(1) and 115 TMA 1970.

[6] In its Paper Hearing Submission, HMRC includes a “Note to Tribunal”, which reads as follows, insofar as relevant:

21. It should be noted that the customer is requested to provide a copy of HMRC's decision(s) that the appeal relates to. Where the customer complies with this instruction HMRC evidences the notice(s) provided as folioed documentation in the statement of case.

22. The cost of keeping this physical evidence for all customers, for all penalties, would be vast and is unrealistic. The systems HMRC have in place shows [sic] a high probability the notices recorded were posted.

23. HMRC are not able to include a copy of £100 [sic] the penalty notice sent to Mrs Griffiths as neither a paper nor a scanned photocopy are held on the department's files.

24. In the recent tax case of Kwiecinski v R & C Commrs (TC/2017/08739) at paragraphs 46–48 Judge [sic for Presiding Tribunal Member] Barrett states:

25. “It is established and accepted that it would place an intolerable burden on HMRC if they were obliged to retain duplicate copies of all standard letters and notices sent out by them to tax payers. Instead, HMRC keep a computerised record which shows, often by reference to “shorthand” codes, which standard letters and notices have been sent to a particular tax payer, and when they have been sent. We are satisfied that HMRC have provided this record in the bundle of documents and further that they have then provided, again within the bundle, the requisite “specimen” copies of the standard letters and notices which have been sent out to the appellant.”

[7] To my mind, this “note” is an extraordinary example of special pleading. It essentially invites this Tribunal to take on trust HMRC's assertions that the relevant notices were produced and validly served on the appellant in this case and to dispense with the requirement that proper evidence should be produced to substantiate HMRC's claims.

[8] HMRC and Presiding Tribunal Member Barrett are doubtless correct when they aver that a requirement to keep physical copies of all notices sent to taxpayers would be unduly burdensome – not to mention an appalling waste of paper. But this is surely not the only way that evidence could be retained and put before the Tribunal. If HMRC had been able to produce true copies (including scanned or electronic copies) of notices as sent, satisfactorily corroborated by internal records such as the “Return Summary”, then absent contradictory evidence this Tribunal could easily satisfy itself that the notices were indeed sent and that HMRC's computer records faithfully recorded the real position.

[9] As it is, the terms of HMRC's “note” and the absence of such evidence make it necessary to consider the initial burden of proof on HMRC.

Burden of proof

[10] HMRC's Paper Hearing Submission states that “[t]he onus of proof is for [HMRC] to show that the penalties have been correctly calculated. The burden then shifts to the [a]ppellant to demonstrate that a reasonable excuse exists for the defaults. The standard of proof is the ordinary civil standard, which is on the balance of probabilities.”

[11] This summary is correct insofar as it goes. However, it omits to mention that the onus on HMRC is not just to demonstrate that the calculation of the penalties was arithmetically correct: HMRC must also demonstrate...

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3 cases
  • Goodman
    • United Kingdom
    • First Tier Tribunal (Tax Chamber)
    • 28 August 2019
    ...Geraint Jones QC in Platt [2019] TC 07131 and adopted the same reasoning. For exactly the same reasons as Judge Austen in Griffiths [2019] TC 07239, he found that HMRC's evidence did not allow him to draw an inference valid notices to file had been served on the appellant. Given that HMRC h......
  • Georgiou
    • United Kingdom
    • First Tier Tribunal (Tax Chamber)
    • 2 July 2019
    ...submission to the case of Kwiecinski v R & C Commrs (TC/2017/08739). I take no account of that case for the reasons I gave in Griffiths [2019] TC 07239 at [7] to [14]. The decision in Kwiecinski is unpublished, not binding and from the passages selectively quoted by HMRC does not appear acc......
  • Tillzane Scaffolding Ltd
    • United Kingdom
    • First Tier Tribunal (Tax Chamber)
    • 12 September 2019
    ...evidenced that notices to file had been given. Judge Popplewell referred to the decisions of Platt [2019] TC 07131 and Griffiths [2019] TC 07239, which had dealt with individual tax returns rather than company tax returns. Although not bound by the decisions he found the sentiments of the j......

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