First-tier Tribunal (Tax)

[2010] UKFTT 591 (TC)

TC00841

Appeal number: TC/2010/05918

CIS Penalty for late return – whether there was reasonable excuse

FIRST-TIER TRIBUNAL

TAX

HI TECH PAINTS LIMITED Appellant

- and -

THE COMMISSIONERS FOR HER MAJESTY’S

REVENUE AND CUSTOMS Respondents

TRIBUNAL: Miss J. Blewitt (TRIBUNAL JUDGE) Mrs A. Christian (MEMBER)

The Tribunal determined the appeal on 14^th October 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^th July 2010,  HMRC’s Statement of Case submitted on 19^th August 2010 and the Appellant’s Reply dated 21^st September 2010.

© CROWN COPYRIGHT 2010

DECISION

1.       This is an appeal by the Appellant against the penalty of £100 imposed for the late submission of a monthly Construction Industry Scheme return (“CIS return”) for the period ended 5^th March 2010 which was received by HMRC on 23^rd March 2010.

2.       The Appellant appealed by Notice dated 14^th July 2010 in which the grounds of appeal are stated as being that the Appellant submitted the return on 15^th March 2010, 4 working days before the due date, which the Appellant submits should be sufficient for first class post. The Appellant contends that a cheque was sent on the same date which was banked by HMRC before the due date of the return, that being 19^th March 2010. The Appellant states that the fault lies with a third party, namely the postal service and the penalty should be overturned.

3.       The Tribunal also considered the correspondence between the parties and the Appellant’s response to HMRC’s statement of case in which the Appellant’s Company Secretary, Leanne Carter, confirms by letter that she witnessed the Company Director, Michael Carter, post the return with a photocopy of the envelope attached.

4.       The Tribunal found that there were inconsistencies in the Appellant’s assertions. The Notice of Appeal states that the return was posted on 15^th March 2010 however a letter from the Appellant to HMRC dated 21^st April 2010 states that the return was posted on 12^th March 2010, which is supported by the envelope attached to the letter of the Company Secretary which is signed by the Appellant and dated 12^th March 2010.

5.       The Tribunal also noted that the Appellant had previously been advised by HMRC in an educational letter dated 24^th February 2010 that returns should be sent using the large letter postage rate and that evidence of postage would be required where an appeal is based on grounds of postal delays. The Tribunal found as a fact that despite having incurred similar difficulties in the very recent past, the Appellant had disregarded the assistance given and had not paid sufficient for first class posting at large letter rate.

6.       The Tribunal noted the Appellant’s assertion that a cheque posted on the same date was banked before the 19^th March 2010, however given that the payment and return are not posted to the same address, the Tribunal found this to be of limited assistance in reaching its decision.

7.       As a result of the inconsistencies in the evidence provided by the Appellant and in the absence of any independent evidence to clarify the date on which the return was posted, together with the Tribunal’s concern as to whether sufficient postage was paid, the Tribunal did not find that there was a reasonable excuse for the late submission of the return.

8.       The Tribunal dismissed the appeal and confirmed the penalty.

9.       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.

TRIBUNAL JUDGE

RELEASE DATE: 24 November 2010