First-tier Tribunal (Tax)

[2011] UKFTT 234 (TC)

TC01099

Appeal number: TC/2010/09312

Partnership tax return. Reasonable excuse.

FIRST-TIER TRIBUNAL

TAX

QURESHI SCHOOL OF MOTORING Appellant

- and -

THE COMMISSIONERS FOR HER MAJESTY’S

REVENUE AND CUSTOMS Respondents

TRIBUNAL:  GERAINT JONES Q.C.

The Tribunal determined the appeal on 31 March 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 dated 01 December 2010 and  HMRC’s Statement of Case submitted on 18 January 2011.

© CROWN COPYRIGHT 2011

DECISION

1.       On 6 April 2009 the appellant partnership was sent a partnership tax return which it was required to return to HMRC. If that return was sent in as a paper return it had to be filed by the 31 October 2009 whereas, if it was filed online, it had to be filed by 31 January 2010.

2.       The paper partnership return was received by HMRC on the 1 December 2009.

3.       A late filing fixed penalty of £100 per partner, making a total of £200, was sent to the partners who have now appealed against that late filing penalty.

4.       The basis upon which the appeal is put is that each partner has a reasonable excuse for the late filing in that the partnership return could not be submitted online because, to do so, third-party software was required given that HMRC did not provide suitable software through its online filing service to allow that to be done.

5.       I do not consider that to be a reasonable excuse for two separate reasons.

6.       The penalty notice was issued to each partner on 16 February 2010, that is, after the date for online filing had passed.

7.       By its letter of 5 November 2010 the appellant's accountants, Tariq Khan & Co, seem to suggest, without expressly saying so, that they tried to file the appellant’s partnership tax return online prior to the final electronic filing date, being 31 January 2010. The accountants do not say in unequivocal terms that they did attempt to do that in respect of this appellant. Indeed, it would be utterly surprising if they had attempted so to do, given that their state of mind was that a paper return had been sent to HMRC already. Thus, on the available evidence, I am far from persuaded that any attempt was made to file electronically in respect of the subject return.

8.       The second reason is that even if an attempt was made to file electronically, there is unchallenged evidence from HMRC that the partnership tax return stated, on its face, that to file it electronically would require the person seeking so to file it, to have third-party commercially available software to enable that to be achieved. This is not one of those cases where HMRC has misled a party wishing to file online that that facility is available, without more, with that party then finding that filing cannot take place without third-party software perhaps at a time when it is too late to obtain it so as to allow timeous filing to take place. If, as the appellant’s accountants contend, they were not prepared to purchase third-party software because it was uneconomic to do so, then it was their duty either to send the paper return in by the latest paper return filing date or to advise their clients so to do.

9.       In my judgement no reasonable excuse can be established in this case.

10.    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.