TelNG Ltd v Revenue and Customs Commissioners
| Jurisdiction | UK Non-devolved |
| Judgment Date | 12 August 2016 |
| Neutral Citation | [2016] UKUT 363 (TCC) |
| Date | 12 August 2016 |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
Judge Roger Berner, Judge Judith Powell
Mr David Knell, Director, appeared for the appellant
Nicholas Chapman, of counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs, appeared for the respondents
Penalty – Non-compliance with information notice – Finance Act 2008 (“FA 2008”), Sch. 36 – Notice requiring production of documents by post or email – Whether notice invalid for not specifying production for inspection at an agreed or specified place – No – Appeal dismissed.
[1] The Appellant (“TelNG”) appealed to the First-tier Tribunal (“FTT”) against an exercise by the Respondents (“HMRC”) of their power under paragraph 1 of Schedule 36 to the Finance Act 2008 (“FA08”) to require a taxpayer to produce documents. The power must be exercised by notice in writing. We shall refer to such a notice as an “information notice” or a “notice”. There were two issues before the FTT. TelNG argued, first, that the form of the notice itself was invalid and accordingly any penalty founded on it could not stand. Effectively, TelNG's argument was that Schedule 36 required the documents to be produced at a place and instead HMRC had required the documents to be sent either by post or by email. TelNG's second argument was that on the facts of the case it had a reasonable excuse for the supposed failure to comply with the notice.
[2] In a decision released on 30 June 2015 [TC/2014/05395] (“the Decision”), the FTT (Judge Poole and Mr Dee) dismissed TelNG's appeal. The FTT decided that the notice was valid and therefore any failure to comply with it resulted in a liability to the statutory penalties. It concluded that paragraph 7(1) of Schedule 36 FA08 (dealing with a person's obligation to produce documents by such means and in such form specified in a notice) was not limited by paragraph 7(2) of the same Schedule in such a way that the notice had to require production “at a place”. In reaching this conclusion the FTT acknowledged that a liability might have been avoided if the Appellant had a reasonable excuse for its failure to comply with the notice but it also decided that TelNG did not have such an excuse.
[3] TelNG now appeals, with permission of the FTT, against the Decision in relation to the validity of the notice. In brief, the issue is whether the FTT made an error of law in concluding that a notice to produce documents solely by email or post is valid. TelNG does not appeal against the decision of FTT that it failed to comply with the notice and did not have a reasonable excuse for its failure.
[4] For the reasons set out below, we have decided that the FTT was right to conclude that a notice to produce documents solely by email or post is valid. Accordingly, TelNG's appeal is dismissed.
[5] References below to numbers in square brackets are, unless otherwise apparent, references to paragraphs of the Decision. The FTT described the evidence before it in [5] and its findings of fact at [6]–[31]. For the purposes of this appeal, the relevant facts may be summarised as follows.
[6] By a letter dated 21 May 2014, HMRC notified TelNG that it was required by information notice served pursuant to paragraph 1 of Schedule 36 FA08 to produce a number of specified documents by 20 June 2014 “either by post to the above address or to me by email”.
[7] The FTT found, at [55], that HMRC granted successive informal extensions of time up to at least 9 July 2014 as well as agreeing first to collect them from one place and then another but that TelNG failed to produce the documents as required and on 21 July 2014 HMRC informed it that they had decided to impose a £300 penalty pursuant to paragraphs 39 and 46 of Schedule 36 FA08. The FTT noted, at [48], that the notice did not require production at a particular place but that TelNG had indicated by email to HMRC on 22 May 2014 (in response to an earlier email rather than to the notice) that “pretty much any time” during the week commencing 2 June 2014 would be convenient for HMRC to collect the documents. HMRC specified 4 June 2014 at a stated address in Cambridge; at the request of TelNG the date and then the place were changed so that TelNG suggested that the documents should be picked up from its accountant. Further delays occurred and the penalty was imposed. HMRC eventually collected the documents from TelNG's accountants on 13 August 2014.
[8] Paragraph 1 of Schedule 36 FA08 is headed “Power to obtain information and documents from taxpayer”. It provides:
(1) An officer of Revenue and Customs may by notice in writing require a person (“the taxpayer”)–
a) to provide information, or
b) to produce a document,
if the information or document is reasonably required by the officer for the purpose of checking the taxpayer's tax position …
[9] Paragraph 7 of Schedule 36 FA08 (“paragraph 7”) is headed “Complying with notices”. It provides:
(1) Where a person is...
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Kinsella
...However that is not the only test for the validity of an information notice as the Upper Tribunal held in TelNG Ltd v R & C Commrs [2016] BVC 537. In that case the Upper Tribunal was concerned with how the documents were to be provided. It found at [26] that the validity of an information n......
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Telng Ltd v HMRC
...[2016] UKUT 0363 (TCC) Appeal number: UT/2015/0121 PENALTY – non-compliance with information notice – Schedule 36, Finance Act 2008 – notice requiring production of documents by post or email – whether notice invalid for not specifying production for inspection at an agreed or specified pla......
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Telng Limited v The Commissioners for HM Revenue and Customs
...[2016] UKUT 0363 (TCC) Appeal number: UT/2015/0121 PENALTY – non-compliance with information notice – Schedule 36, Finance Act 2008 – notice requiring production of documents by post or email – whether notice invalid for not specifying production for inspection at an agreed or specified pla......