First-tier Tribunal (Tax)

[2010] UKFTT 322 (TC)

TC00609

Appeal number: TC/2010/00497

PAYE- failure to return forms P35 and P14- P14 to be obtained from revenue – P35 returned on time but without form P14 – P35 returned late by revenue – further delay by appellant in re-submitting both  forms – appellant had had similar problems in the past – no reasonable excuse – appeal dismissed.

FIRST-TIER TRIBUNAL

TAX

                                          MR MARTIN CURRIER                         Appellant

                                                                      - and -

                                 THE COMMISSIONERS FOR HER MAJESTY’S

                                                   REVENUE AND CUSTOMS               Respondents

                        TRIBUNAL: David S Porter (Judge)

                        Robert Barraclough (Member)

The Tribunal determined the appeal on 15 April 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 08 December 2009,  HMRC’s Statement of Case submitted on 11 February 2010 and the Appellant’s Reply dated 02 March 2010.

© CROWN COPYRIGHT 2010

DECISION

1.          The Appellant, Mr Currier, submits that he had a reasonable excuse for his failure to submit his P14 with his P35 these being the end of year details for his two employees. He accepts that he did not include the P14 with his submission but he says that the Respondents (HMRC) took 17 days to return the original form to him for correction and that he returned both documents by 21 June by which time he was only 4 weeks late. HMRC say that form P35 was sent to Mr Currier on 5 January 2009 that he needed to obtain form P14 from HMRC and that he had had ample time to complete both the forms P35 and P14 and that he did not have a reasonable excuse for his failure.

The Facts

2.          HMRC sent notice P35, Employer Annual Return, to Mr Currier so that he received it on 5 January 2009. The notice required Mr Currier to return form P35 together with form P14, which was not sent out with form P35, but had to be obtained from HMRC. The notice indicates that if guidance is needed in completing the forms then the taxpayer should telephone the Employer Help line. Mr Currier returned the form P35 by 19 May, but failed to include form P14 and to tick an appropriate box. 17 days later on 4 June 2009, HMRC returned the form P35 and asked him to complete the box and return the form P35 with form P14.Mr Currier returned both forms on 25 June 2009, having corrected form P35. Section 98 A (2) Taxes Management Act 1970 provides that a penalty of £100 can be levied for each 50 employees for every month or part thereof that the return is outstanding. As the return was outstanding for the period 20.05.09 to 19.06.09 a penalty of £100 was due for that month and a further penalty of £100 was raised for the part month from 20.06.09 to 25.06.09.and the penalty notice was served on 15 09.09. Mr Currier appealed against the two penalties on 23 September 2009 and said that HMRC should have sent him a form P14 and that it was unreasonable to complain of his tardiness when HMRC had taken 17 days to return his form. Further he only had two employees and he had been struggling with his business working 12 hours each day. Mr Currier requested a review on 23 October 2009 and HMRC responded on 2 December 2009 and refused his appeal on the basis that form P14 was not with the return and that it was his responsibility to see that it was returned on time. Mr Currier appealed to the tribunal on 8 December 2009 and in his appeal notice stated :

·       HMRC were in possession of his completed form P35 on 19 May 2009.

·       He advised that P14 would follow.

·       HMRC did not raise a requisition but returned form P35 17 days later and as a result

·       He received two penalties of £100 each.

·       Form P14 should be sent automatically as the number of his employees did not alter.

·       At worst he should only pay £100.

In his covering letter of 2 March 2010 he indicated that he paid income tax of £21.834.30 and a further £8000 by way of VAT in a period when he alleges that he made a loss during this period. He conceded that he had received penalties for late returns in the years 2003/4 and 2004/5. He had also been told that there would be further penalty for the year 2007/8 but HMRC had withdrawn the same.

The decision

3.     We have considered the facts and we have decided that Mr Currier does not have a reasonable excuse. He has been in business for some time and is aware of his obligations to complete the forms. Correct forms need to be submitted because HMRC have to process the forms to check that the correct amounts of PAYE and NI have been paid. Mr Currier was on notice that if he failed to complete the returns he would receive a penalty. He had been penalised in 2003/4 and 2004/5. He had similarly had a penalty raised in the year 2007/8 which had been withdrawn. Against that background, he knew that he had to fulfil his obligations. We note that he has paid income tax in excess of £21,000 and we assume he must have an income in excess of £50,000. We would have thought that if he was in any doubt about completing the forms he could have instructed an accountant to assist him. It is not possible to reduce the penalty as the legislation specifies the amount of the penalty when it is found to be due. There is no obligation on HMRC to respond quickly in any event as they are entitled to assume that the forms are correct.

4.     The hearing having taken place in the absence of the Appellant, the Appellant has a right to apply for this decision to be set aside pursuant to Rule 38 of The Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (“the Rules”).  The Appellant has a right to apply for permission to appeal against this decision pursuant to Rule 39 of the Rules.  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.

TRIBUNAL JUDGE

RELEASE DATE: 8 July /2010