[2010] UKFTT 541 (TC)

TC00794

Appeal number: TC/2010/05945

CONSTRUCTION & INDUSTRY SCHEME – Penalty for filing late return – whether reasonable excuse – no – Appeal dismissed

FIRST-TIER TRIBUNAL

TAX 

	HOLLAND KITCHEN & BATHROOM DESIGN	Appellant

	- and -

	THE COMMISSIONERS FOR HER MAJESTY’S
	REVENUE AND CUSTOMS	Respondents

		TRIBUNAL: 	MICHAEL TILDESLEY OBE (TRIBUNAL JUDGE)									

The Tribunal determined the appeal on 15 September 2010 without a hearing under the provisions of Rule 26 of the Tribunal Procedure (First-tier Tribunal)(Tax Chamber) Rules 2009 (default paper cases) having first read the Notice of Appeal dated 14 July 2010,  HMRC’s Statement of Case submitted on 19 August 2010 and the Appellant’s Reply dated 26 August 2010.

© CROWN COPYRIGHT 2010

DECISION

1.	The Appellant was appealing a penalty of ₤100 for the late submission of a monthly Construction Industry Scheme (CIS) return for the period ended 5 April 2010.
2.	The Appellant contended that it posted the return on 9 April 2010
3.	The Tribunal  finds that
(1)	The due date for receipt of the return was 19 April 2010.
(2)	HMRC received the return on 22 April 2010. The period of default was 3 days.
(3)	The Appellant held no record to corroborate its assertion that the return was posted on 9 April 2010.
(4)	The Appellant’s excuse for not obtaining proof of postage was that it did not have time to trek 1.5 miles to a Post Office.
(5)	On 7 December 2009 HMRC sent an educational letter to the Appellant in response to a previous Appeal in respect of a late filing of a CIS return. The letter advised the Appellant that returns should be sent using the large letter postage rate and evidence of postage would be required in cases of postal delays.
4.	The Tribunal has limited jurisdiction in penalty Appeals. It has no power to mitigate the penalty. The Tribunal can either confirm the penalty or quash it if satisfied the Appellant has a reasonable excuse for its default. The Appellant can avoid the penalty if it satisfies the Tribunal on a balance of probabilities that it has a reasonable excuse for not furnishing the return on time. If the trader cannot establish a reasonable excuse, the legislation takes no account of the difference between the trader who has made a genuine effort to comply albeit without success and the trader who has made very little effort. Either the trader is on time or he is not; either he exercises due diligence or he does not. No account is taken of the degree of culpability.
5.	In considering a reasonable excuse the Tribunal will examine the actions of the Appellant from the perspective of a prudent business person exercising reasonable foresight and due diligence and having proper regard for his responsibilities under the Tax Acts. 
6.	The Appellant was aware of its responsibilities to file the return by the 19 April 2010 and of the consequences if it failed to meet the deadline. On 7 December 2009 HMRC advised the Appellant of the need for evidence of postage in the event of non-receipt of the return by the due date. The Appellant held no evidence to corroborate the purported posting of the return on 9 April 2010. A prudent business person would not have ignored HMRC’s earlier warning and obtained some proof of posting the disputed return. The Tribunal finds that the Appellant’s actions were not those of a prudent business person. .
7.	The Tribunal holds that the Appellant did not have a reasonable excuse for filing late the CIS return for the period ended 5 April 2010. The Tribunal dismisses the Appeal and confirms the penalty of ₤100.
8.	This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009.   The application must be received by this Tribunal not later than 56 days after this decision is sent to that party.  The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.

MICHAEL TILDESLEY OBE
TRIBUNAL JUDGE
RELEASE DATE: 29th September 2010