David Beadle v The Commissioners for HM Revenue and Customs
| Jurisdiction | UK Non-devolved |
| Judge | Mr Justice Arnold,Judge Cannan |
| Neutral Citation | [2019] UKUT 0101 (TCC) |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Subject Matter | Tax,1 April 2019 |
| Date | 01 April 2019 |
| Published date | 01 April 2019 |
[2019] UKUT 0101 (TCC)
Appeal numbers
UT/2018/14, 15
Partner Payment Notices – penalty for late payment – jurisdiction of FTT on appeal
against penalty notice to entertain challenge to PPN – whether reasonable excuse –
whether special circumstances – whether penalty notices invalid due to incorrect
statement of date on which PPN due or due to failure to identify issuing officer –
applicability of section 114(1) Taxes Management Act 1970.
UPPER TRIBUNAL
TAX AND CHANCERY CHAMBER
DAVID BEADLE
Appellant
- and –
THE COMMISSIONERS FOR HER
MAJESTY’S REVENUE AND CUSTOMS
Respondents
Tribunal: The Hon Mr Justice Arnold and Judge Jonathan Cannan
Sitting in public at the Rolls Building, Fetter Lane, London EC4A 1NL on 12-13 March
2019
Keith Gordon and Ximena Montes Manzano, instructed by Jeffries Law LLP, for the
Appellant
Aparna Nathan QC, instructed by the General Counsel and Solicitor to HM Revenue and
Customs, for the Respondents
© CROWN COPYRIGHT 2019
Page 2
DECISION
Introduction
1. This is an appeal from two decisions of the First-Tier Tribunal (Tax): one by
Judge Jonathan Richards dated 5 July 2017 [2017] UKFTT 544 (TC) and one
by Judge Rupert Jones dated 17 November 2017 [2017] UKFTT 829 (TC). In
the first decision Judge Richards held that the FTT did not have jurisdiction
when considering an appeal against a penalty notice for non-payment of a
Partner Payment Notice (“PPN”) to entertain challenges to the underlying PPN.
In the second decision Judge Jones held that the Appellant did not have a
reasonable excuse for late payment of the PPN, nor were there special
circumstances. He also rejected certain challenges to the validity of the penalty
notice.
The facts
2. There is no dispute as to the facts, which can be summarised as follows.
3. The Appellant was a participant in a marketed tax avoidance scheme involving
a partnership called Ingenious Film Partners LLP (“the Partnership”) in the year
ending 5 April 2005. The Partnership entered into arrangements (which were
“DOTAS arrangements” for the purposes of section 219(5) Finance Act 2014
(“FA 2014”)) by which it was claimed that a trading loss was realised for that
year. The Appellant claimed to carry back his share of that loss to reduce his
taxable income for the tax year 2001-02 and obtained relief by way of
repayment of approximately £100k calculated by reference to tax originally paid
for the 2001-02 tax year.
4. HMRC opened an enquiry into the Partnership’s tax return for, among others,
the tax year 2004-05. On 30 November 2012 HMRC issued the Partnership
with a closure notice reducing the Partnership’s trading loss to nil. There is an
appeal against the closure notice.
5. On 3 October 2014 HMRC sent the Appellant a letter informing him that he
would soon be receiving a PPN in relation to his involvement in the Partnership
scheme in the 2004-05 tax year. The letter enclosed an information sheet entitled
“CC/FS24 - Tax avoidance schemes - accelerated payments” which set out the
consequences of non-payment of the PPN.
6. On 17 October 2014 HMRC issued the Appellant with the PPN. That notice
required the Appellant to pay the sum of £100,054.80.
7. HMRC sent the Appellant a letter reminding him of the deadline for payment
of the sum due pursuant to the PPN on 5 December 2014. This letter also stated
that late payment would result in additional amounts being due.
8. By letter dated 5 January 2015 the Appellant made representations against the
validity of the PPN on the basis that: (i) the amount of “understated tax”
specified in the notice (which determined the amount due under the PPN) was
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