Peter Marano v The Commissioners for HM Revenue and Customs [2023] UKUT 00113 (TCC)
| Jurisdiction | UK Non-devolved |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Judge | Mr Justice Fancourt,Judge Vimal Tilakapala |
| Published date | 19 May 2023 |
| Subject Matter | 17 May 2023 |
Neutral Citation Number: [2023] UKUT 00113 (TCC)
Case No: UT/2020/000246
IN THE UPPER TRIBUNAL
TAX AND CHANCERY CHAMBER
On appeal from the First-tier Tribunal (Tax Chamber)
Royal Courts of Justice
Rolls Building, Fetter Lane, London, EC4A 1NL
Date: 17 May 2023
PROCEDURE (i) automated notices requiring returns – effect of s 103 FA 2020, (ii) whether
service provisions of s 115 TMA 1970 are the only means of giving notice of penalty
assessments PENALTIES (i) whether computation of tax geared penalties under paras 5 and
6 Schedule 55 FA 2009 should take into account prepayments of tax, (ii) scope of “special
circumstances” justifying penalty reduction
Appeal allowed in part
Before :
MR JUSTICE FANCOURT
UPPER TRIBUNAL JUDGE TILAKAPALA
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Between :
Peter Marano
Appellant
- and -
Commissioners for HM Revenue & Customs
Respondents
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Representation
For the Appellant: Keith Gordon, Counsel instructed by RSM UK Tax
For the Respondents: Sadiya Choudhury, Counsel instructed by the General Counsel and
Solicitor to His Majesty’s Revenue and Customs
Hearing date: 7 February 2023
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DECISION
1. This is an appeal by the taxpayer, Mr Marano, from a decision of the First-tier
Tribunal (“FTT”) dated 23 April 2020 (“the Decision”), which confirmed a
discovery assessment in the amount of £5,744,219 and upheld a series of
penalties issued under Schedule 55 to the Finance Act 2009 (“Sched 55”) for
the failure by Mr Marano to file a self-assessment tax return for the tax year
2012-13.
2. The penalties issued by HMRC upheld by the FTT included two large “tax-
geared” penalties, issued on 14 March 2017 under Sched 55 paras 5 and 6, for
continuing default in filing six and twelve months after the penalty date. By
2017, Mr Marano had belatedly filed a tax return, too late to be assessed as such
but which enabled HMRC to calculate and issue a discovery assessment. This
assessment was based on a taxable capital gain, which Mr Marano’s accountants
had previously disclosed to HMRC and which Mr Marano had in fact
voluntarily paid during the 2012/13 tax year. Penalty assessments in the
aggregate sum of £574,422 were then issued, representing 5% of the discovery
assessment under each of Sched 55 paras 5 and 6. The penalty assessment did
not take account of the voluntary prepayment, or of payments on account of his
2012/13 tax liability in the sum of £29,993.69 made under s.59A TMA. The
FTT decided that the voluntary disclosure and prepayment did not amount to
special circumstances under Sched 55 para 16 justifying a reduction in the
amount of the penalties.
3. Permission to appeal was granted by Upper Tribunal Judge Jonathan Richards
on 1 December 2020, there were four grounds of appeal that were argued before
us, raising the following issues:
i) Whether a valid notice to file a tax return had been issued to Mr Marano
by an officer of HMRC for the tax year in question, in accordance with
s.8 TMA, and the penalty assessments had been validly issued on behalf
of HMRC under Sched 55 para 18. These both turn on the same issue
about the necessary degree of involvement of an individual officer of
HMRC in issuing the notices. The FTT held that some authorisation by
an officer of HMRC could be inferred from the known facts and that the
notices had been validly issued.
ii) Whether the penalty notices issued on 3 March 2015 and 14 March 2017
and received by Mr Marano had been properly given to him, as they were
not served personally or left at or sent by post to his usual or last-known
place of residence or business. This is an issue about whether the service
provisions set out in s.115 TMA are the only permitted means of giving
notice of such assessments. The FTT found as a fact that the s.8 notice
was sent to the last-known place of residence and held that the penalty
notices were validly given to Mr Marano at a different address, pursuant
to the terms of reg. 75 of the Limited Liability Partnerships (Application
sufficiently given to Mr Marano as a result of his receiving the notices
indirectly, which it found as a fact that he did.
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