First-tier Tribunal (Tax)

[2011] UKFTT 163 (TC)

                                          TC01032                                                                            

Appeal number: TC/2010/03161

Penalty for late filing of partnership tax return- whether reasonable excuse- reliance on accountants who did not have the necessary software to submit online- appeal dismissed.

FIRST-TIER TRIBUNAL

TAX

                                    THE AMELIE PARTNERSHIP

(Mrs DIANE JEWISS AND Mr TONY JEWISS)

                                                                                                             Appellant

                                                                      - and -

                                 THE COMMISSIONERS FOR HER MAJESTY’S

                                                   REVENUE AND CUSTOMS               Respondents

                        TRIBUNAL: CHARLES HELLIER (TRIBUNAL JUDGE)                                                                    DAVID EARLE                                

The Tribunal determined the appeal on 21 January 2011 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,  HMRC’s Statement of Case, the Appellant’s Reply, and the Appellant’s response to the tribunal’s Direction released on 16 August 2010

© CROWN COPYRIGHT 2011

DECISION

1.        On 5 July 2010 this tribunal considered the evidence before it relating to this appeal, and on 16 August 2010 issued a Direction setting out its reasoning in relation to, and conclusions on, that evidence, and directing that the Appellant have 28 days in which to serve further evidence.

2.        Paragraphs 1 to 23 of that Direction form part of this decision. It is annexed to it.

3.        On 28 August 2010 the Appellant’s accountants wrote to the tribunal in accordance with the Direction.

4.        Judge Hellier apologises to the parties for the delay in dealing with this appeal following the receipt by the tribunal of that letter. The delay was wholly attributable to an oversight on his part.

5.        In the Direction we said at [10] that there was no direct evidence before us as to (a) whether the accountants had the necessary third part software needed to submit the tax return online, (b) whether, if they had it, it worked, and (c) if they did not have it, the reasons why. At [21] we said that on the evidence before us it looked as if the accountants did not have that software, and, at [22] that on that basis we would conclude that the Appellant did not have a reasonable excuse, But we said that it was only just to give the Appellant a chance to adduce further evidence on these issues, as to whether further attempts were made to submit the return, and of any other relevant circumstances.

6.        The Appellant’s accountants’ letter of 28 August 2010 says nothing about the question of third party software. We conclude that they did not have it, and that as a result they were not able to submit the return online. This was therefore the reason for the late submission of the return.

7.        For the reasons in the Direction we find that neither the Appellant’s reliance on its accountants, not their failure to have the third party software affords a reasonable excuse for the delay.

8.        In the accountants’ letter of 24 August 2010 four observations are made:

(a) the 2008 return did not say that it could not be submitted online;

(b) if HMRC were unable to process the return, why were they sent activation codes;

(c) there was no attempt to hide any tax liability; and

(d) at no time did HMRC’s paperwork or advertising say that the return could not be submitted online.

9.        Paragraphs (a), (b), and (d) miss the point. The return could not be submitted because the accountants did not have the necessary third party software. They failed to procure it, and as a result of that (unreasonable) failure the return was submitted late. As to (c) it is irrelevant to the question of whether there was a reasonable excuse for the failure to submit the return on time.

10.     We dismiss the appeal.

11.     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.

CHARLES HELLIER

TRIBUNAL JUDGE

RELEASE DATE: 17 FEBRUARY 2011