Murphy
| Jurisdiction | UK Non-devolved |
| Judgment Date | 31 July 2014 |
| Neutral Citation | [2014] UKFTT 734 (TC) |
| Date | 31 July 2014 |
| Court | First Tier Tribunal (Tax Chamber) |
[2014] UKFTT 734 (TC)
Judge Alastair J Rankin, Mr John Adrain
The Appellant appeared in person
Mrs Linda Ramsey and Mrs Lesley Crawford appeared for the Respondents
Class 2 NICs - Failure to pay - Whether failure to pay attributable to ignorance or error - Whether due to failure to exercise due care and diligence - Appointment of accountant to deal with all tax matters - Accountant failed to correctly advise appellant - Appeal allowed.
The First-tier Tribunal (FTT) has allowed a contributor's appeal against HMRC's decision not to allow him to pay late Class 2 National Insurance contributions (NICs), finding that his failure to pay Class 2 NICs from 26 March 1995 to 8 April 2006 was attributable to his ignorance, but that his ignorance was not due to his failure to exercise due care and diligence as he had relied on his accountant to advise him on all aspects of his tax affairs.
Mr Murphy became self-employed on 26 March 1995, but although he had been registered with HMRC as self-employed from that date he had not notified the Department of Social Security of his self-employment and had therefore not paid any Class 2 NICs. When in 2012 Mr Murphy discovered the error and tried to pay the arrears, HMRC advised him that he could only pay for the period from 9 April 2006 unless he could show that his failure to register and pay was due to his ignorance or error and that such ignorance or error was not the result of his failure to exercise due care and diligence. Mr Murphy contended that he had relied on his accountant, who had been recommended to him, to deal with all necessary registrations and that therefore his failure to register and pay was due to his ignorance but that his ignorance was not the result of a failure by him to exercise due care and diligence.
The FTT found itself bound by the comments of Lady Justice Arden in R & C Commrs v KearneyTAX[2010] BTC 887 and following the decision in SchonfieldTAX[2013] TC 02658, found that Mr Murphy's failure to pay Class 2 NICs from 26 March 1995 to 8 April 2006 was attributable to his ignorance, but this was not due to his failure to exercise due care and diligence as he had relied on his accountant to advise him on all aspects of his tax affairs. Mr Murphy could therefore make contributions for the extended period.
In this case the taxpayer had registered as self-employed with HMRC, but not with the then Department of Social Security. As HMRC now deals with NICs and the current...
To continue reading
Request your trial
-
Taylor
...Regulations 2001, regulation 6. The unfortunately vague evidence here can be contrasted with the apparently cogent evidence in Murphy TAX[2014] TC 03855, where in a short, crisp decision, the result favoured the taxpayer. Unreported, High Ct of Justice 28/3/94, Owen J, frequently cited in d......
-
Xu
...where the appellant considered that the agent was competently managing his tax affairs.[13] Thirdly, the Appellant refers to Murphy TAX[2014] TC 03855. In that case it was held that the appellant's failure to pay Class 2 National Insurance contributions was not due to his failure to exercis......
-
Chilvers
...was issued. [16] On 9 August 2017 Mr Chilvers appealed based on the decisions in Schonfield[2013] TC 02658 (“Schonfield”) and Murphy[2014] TC 03855. [17] Mr Chilvers appealed to the Tribunal on 18 October 2017 on the same basis. [18] The onus of proof lies with Mr Chilvers. Mr Chilvers' evi......