Hurst
| Jurisdiction | UK Non-devolved |
| Judgment Date | 01 May 2019 |
| Neutral Citation | [2019] UKFTT 286 (TC) |
| Date | 01 May 2019 |
| Court | First Tier Tribunal (Tax Chamber) |
[2019] UKFTT 286 (TC)
Judge Christopher Staker
Income tax – Individual tax return – Penalties for late filing – Whether properly imposed – Whether notice given for the purpose of establishing the amounts in which a person is chargeable to income tax … – TMA 1970, s. 8 – FA 2009, Sch. 55.
Appeals – Principles of precedent – Previous decisions of the First-tier Tribunal.
The First-tier Tribunal (FTT) allowed a taxpayer's appeal against late filing penalties. The FTT held that the notice to file was invalid because HMRC were already aware of the taxpayer's tax underpayment, and accordingly the penalties were also invalid.
HMRC issued Mr Hurst (the appellant) with a notice to file a tax return for 2015–16. HMRC submitted that they issued a notice to file because: the appellant had not paid enough tax through his tax code as they had shown in their PAYE calculation (P800); the underpayment could not be collected through his tax code; and the appellant had not responded to their voluntary payment letters.
As the appellant had not submitted a tax return for 2015–16 HMRC issued him with late filing penalties under FA 2009, Sch. 55.
The appellant appealed on the grounds that he was within the PAYE system and any underpaid tax could have been dealt with by way of a P800. He relied on the case of Goldsmith [2018] TC 06284. In Goldsmith the FTT had found that returns issued to collect tax already calculated and “assessed” by P800s, and not for the purpose of establishing the taxpayer's taxable income and tax payable, did not meet the statutory requirements of TMA 1970, s. 8(1), and accordingly the late filing penalties were invalid. In response to HMRC's statement of case the appellant also relied on the similar cases of Groves [2018] TC 06541 and Lennon [2018] TC 06453.
The FTT noted that similar conclusions to those in Goldsmith were reached in Griffiths [2018] TC 06697 and Mansoor [2018] TC 06518. But on the other hand, in Crawford [2018] TC 06594, the FTT disagreed with Goldsmith. The FTT instead held that the words “for the purpose of establishing” in TMA 1970, s. 8 did not mean merely “for the purpose of calculating”, but rather, “for the purpose of calculating and assessing”. It was said that an assessment “fixes or settles a person with liability to the tax as calculated”, and therefore a notice under TMA 1970, s. 8 could validly be issued simply to assess a known tax liability. The FTT therefore noted that there was a conflict of authorities at FTT level and that the issue had not been considered at the Upper Tribunal or higher level.
In this case the tribunal found it appropriate to follow the line of authority in Goldsmith.
As HMRC had indicated that they were aware of the underpayment of tax when they issued the P800, the FTT found that it was not possible for HMRC to have validly issued a notice to file.
The appeal was accordingly allowed.
The FTT found it appropriate to follow the line of authority in Goldsmith [2018] TC 06284 and similarly decided cases and therefore not to follow the conflicting decision in Crawford [2018] TC 06594. HMRC's appeal against the decision in Goldsmith is due to be heard by the Upper Tribunal in July 2019.
[1] A number of recent decisions of this Tribunal have considered whether HMRC may appropriately use the self-assessment system to collect unpaid tax from a person within the PAYE system, and to impose penalties on such a taxpayer for not submitting a return in such circumstances. Although these...
To continue reading
Request your trial
-
Hurst
...(SI 2009/273), r. 39. The First-tier Tribunal (FTT) refused HMRC's application for permission to appeal against the decision of Hurst [2019] TC 07125. HMRC had not objected to the case law relied on by the taxpayer in the original decision, and although HMRC's appeal had a real prospect of ......
-
Wickford Development Company Ltd
...of this Tribunal do not constitute binding precedent and they are of presumptive or persuasive authority only. She referred me to Hurst [2019] TC 07125 (Judge Christopher Staker) at [19] to [24], which summarised the law in this regard. In particular, Ms Black relied on Judge Staker's summa......