First-tier Tribunal (Tax)

[2011] UKFTT 52 (TC)

TC00930

Appeal number: TC/2010/05173

Stamp Duty Land Tax – penalty for late submission of Return – whether reasonable excuse - yes

FIRST-TIER TRIBUNAL

TAX

MR A N PERICLEOUS Appellant

- and -

THE COMMISSIONERS FOR HER MAJESTY’S

REVENUE AND CUSTOMS Respondents

TRIBUNAL: MICHAEL S CONNELL (TRIBUNAL JUDGE) MICHAEL ATKINSON (MEMBER)

Sitting in public at York House York Place Leeds LS1 2ED on 13^th October 2010

Mr J Walker, Solicitor, for the Appellant

Mrs D Smith, Senior Officer of HMRC, for the Respondents

© CROWN COPYRIGHT 2010

DECISION

1.       This is an appeal against a £100 penalty for late submission of a Stamp Duty Land Tax Return (SDLT 1).

2.       Under S.76 of the Finance Act 2003 an SDLT 1 must be delivered to HMRC within 30 days of completion of a land transaction.

3.       The land transaction in question, the purchase of 39 Swinegate York by Mr A N Pericleous, was completed on 12 November 2009. Mr Walker, Solicitor, of Guest Walker Solicitors acted on behalf of the seller but agreed to act as agent for Mr Pericleous in connection with completion and filing of the SDLT 1. Mr Walker says that the Return was sent to HMRC on 30 November 2009 via the document exchange system. He produced a copy of the covering letter to HMRC which shows that the letter was accompanied by a cheque also dated 30 November 2009 for £752 in payment of the SDLT. A copy of that cheque was also produced. The cheque refers to the SDLT 1 unique reference number (UTRN) and quoted UTRN 407223952ME.

4.       HMRC acknowledged that they received Guest Walker’s letter of 30 November 2009 along with the cheque but say that they did not receive an SDLT 1 until the 18 December 2009 which bore a different UTRN number being 307278265MX and that because this was more than 30 days after the effective date of the transaction a £100 penalty was payable.

5.       HMRC say that numbers beginning with “4” indicate that the SDLT has been filed on-line whereas an SDLT 1 bearing a number beginning with “3” would be a paper Return. HMRC say that the reference number quoted 407223952ME would indicate that the Return was filed on-line but that this in fact had not happened because apparently Messrs Guest Walker were unable to file the Return on-line as they did not act on behalf of Mr Pericleous. HMRC say that they telephoned Guest Walker regarding the discrepancy and a Mrs Kemp confirmed that they had attempted to file on-line but were unable to do so and consequently a paper Return was filed. However HMRC say they were not able to explain why a different reference number had been quoted on the payment, nor how they had been able to obtain the on-line reference number 407223952ME because this was only issued once the Return had been filed on-line.

6.       HMRC say that the vast majority of SDLT 1 forms are scanned and processed within 24 hours of receipt and none are scanned outside 48 hours of receipt. There were no delays or backlogs recorded during the relevant period. HMRC also say that although payment of the Stamp Duty Land Tax was made on time, a proper valid  Return had not been received within the 30 day period and that consequently the £100 penalty was payable.

7.       Mr Walker says that his firm received no notice of rejection of the SDLT 1 which he says was sent with his letter of 30 November 2009. Had his letter not enclosed the completed form SDLT 1 then HMRC’s turnaround time would surely have triggered a rejection or a query by HMRC. In Mr Walker’s submission HMRC simply failed to log the SDLT 1 until 18 December 2009. He says that it is not sufficient for HMRC to argue that there is no evidence to suggest the SDLT was received before 18 December 2009. Mr Walker said that he was unable to prove the date of posting of the SDLT 1 which he says was enclosed with his letter of 30 November. He accepted that his firm had attempted an on-line submission quoting the on-line number 407223952ME in correspondence, but then filed a paper Return with the different number with the consequence that the letter and cheque had possibly become detached from the paper Return which caused the processing of the Return to be delayed.

8.       The Tribunal concluded that it was difficult to decide conclusively precisely what had happened but it accepted the Appellant’s submissions that a valid SDLT 1 had been enclosed with its letter and cheque of 30 November 2009 and accordingly allowed the appeal.

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.

M S CONNELL

TRIBUNAL JUDGE

RELEASE DATE: 14 January 2011