Rogers
| Jurisdiction | UK Non-devolved |
| Judgment Date | 19 June 2018 |
| Neutral Citation | [2018] UKFTT 312 (TC) |
| Date | 19 June 2018 |
| Court | First Tier Tribunal (Tax Chamber) |
[2018] UKFTT 0312 (TC)
Judge Nigel Popplewell
Income tax – Individual tax return – Penalties for late filing – Whether properly imposed – No – No evidence that a valid notice to file under TMA 1970, s. 8(1) had been given to the taxpayer by an officer of the Board – Appeal allowed.
The First-Tier Tribunal (FTT) decided that the late filing penalties were not valid because HMRC could not prove they adhered to the proper procedure.
This was an appeal against the following penalties visited on the appellant (NR) under FA 2009, Sch. 55 for the late filing of an individual tax return for the tax year 2015–2016: A late filing penalty of £100 (“late filing penalty”); A daily penalty of £900 (“daily penalty”); A 6 month late filing penalty of £300 (“6 month penalty”).
The FTT found the following relevant facts: NR had been self-employed since 21 November 1988 and had completed self-assessment tax returns on line for tax years 2007–2008 to 2014–2015 inclusive. The respondents' (or “HMRC”) computer records suggested that a “notice to file” was issued to NR on 6 April 2016 at his home address. The FTT dealt with this and the other evidence that HMRC had adduced to justify that a valid notice to file was served on NR. The filing date for a tax return for the tax year ending 5 April 2016 was 31 October 2016 for a non-electronic return, and 31 January 2017 for an electronic return; NR's electronic return for the year 2015–2016 was received by HMRC on 23 October 2017 and was processed on 24 October 2017; As the return was not received by the filing date, HMRC issued a notice of penalty assessment on or around 7 February 2017 for the late filing penalty. As the return had still not been received 3 months after the penalty date, HMRC issued a notice of daily penalty assessment on or around 11 August 2017 for the daily penalty; As the return had still not been received 6 months after the penalty date, HMRC issued a notice of penalty assessment on or around 11 August 2017 for the 6 month penalty.
The FTT summarised the relevant legislation. In the notice of appeal generated on 23 October 2017 NR said that he had appealed the original decision to HMRC and that he was appealing direct to the Tribunal before receiving a response from HMRC. No further evidence was adduced about this appeal, but HMRC say in their Statement of Case (SoC) that there was no appeal to HMRC (nor indeed any review). However HMRC make no further reference to this. The FTT took the view that either NR had made a valid and timely appeal to HMRC; or, if he hadn't, he should be permitted to appeal out of time. Any lateness is neither serious nor significant, and any prejudice to the appellant outweighs any prejudice to HMRC.
The discussion commenced with the evidence that HMRC had provided regarding the validity of the notice. The FTT could not infer that a s. 8(1)(a) notice was given to this particular appellant by an officer of the Board.
There was no signature block on the pro forma letter. It was therefore not at all clear whether this pro forma letter would have been signed by a particular officer or whether it would have been signed by HMRC (or indeed whether it would have been signed at all). There was nothing in the SoC which suggested that the notice to file was given by an officer. Similarly, there is nothing in the computer printouts which indicated whether an officer, and if so which officer, gave the notice to file to NR.
The wording in the pro forma letter was in the third person. In other words.
It seemed that HMRC were perfectly capable of providing evidence of letters executed by either an unidentified officer or an identified officer. But they had not done this in the case of the purported notice to file.
In short, the FTT was being asked to speculate by HMRC that a notice to file was given to this appellant by an officer of the Board. The FTT was not prepared to so speculate. The FTT could not draw an inference that this was the case from the evidence that had been presented.
Under these circumstances therefore, the FTT found that no valid notice to file under TMA 1970, s. 8(1)(a) was given to NR by an officer of the Board.
NR had not failed to deliver a return under TMA 1970, s. 8(1) and so Sch. 55 is not engaged. The penalties were invalidly assessed.
In these circumstances there was no need for the FTT to consider reasonable excuse, special circumstances or proportionality.
The case demonstrated that HMRC expected the FTT to agree on penalties with no real evidence of the correct issuing procedures. It is a good thing that the Tribunal procedure exists to uphold the taxpayer's appeal when HMRC abuses procedures set up for the protection of both parties. One hopes that HMRC will follow proper procedure in light of this...
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Smith
...“officer of the Board” point, which we consider at paragraph 105ff below. That decision was appealed to the UT, and heard with Rogers [2018] TC 06542 (“Rogers”). The UT held at [61] of Rogers & Shaw that: Mr Shaw had not put forward any submissions to the FTT that the Notice to File was inv......
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Revenue and Customs Commissioners v Rogers and another
...Tribunal (UT) overturned the First-tier Tribunal (FTT) decisions on penalties for the late filing of self-assessment returns in Rogers [2018] TC 06542 and Shaw [2018] TC 06547. The UT held that: the FTT does have jurisdiction to consider the validity of a notice to file in a penalty appeal;......