First-tier Tribunal (Tax)

Evidence

(1)        The Club’s Notice of Appeal dated 2 June 2011.

(2)        HMRC’s Statement of Case submitted on 8 July 2011.

(3)        The following documents attached to the Statement of Case:

(a)        copy of HMRC’s ‘Employer P35 Penalty History’ for the Club showing a penalty of £400 was issued on 27 September 2010;

(b)        copy of the Club’s 2009-10 P35 showing it was filed on 14 June 2011;

(c)        print out from HMRC confirming receipt of an appeal against the penalty was received on 2 November 2010;

(d)        copy of a letter, dated 29 March 2011, from HMRC to the Club rejecting the Club’s appeal and offering a review of the decision to confirm the penalty;

(e)        copy of a request, dated 5 April 2011, by the Club for a review of the decision by HMRC to uphold the penalty;

(f)         copy of a letter, dated 18 May 2011, from HMRC to the Club confirming the decision;

(g)        the Notice of Appeal;

(h)        copy of an ‘Employer Notification’ issued by HMRC “to complete form P35 Employer Annual Return” by “19 May following the end of the tax year 2009-10” which warns that “we will charge a penalty if any part of your return is received late and/or not filed online”; and

(i)         copy of a print out from HMRC showing that such notification was sent to the Club on 10 January 2010.

Facts

(1)        The Club is a part-time, voluntary, non-profit-making, charitable organisation which does not have an internet connection.

(2)        Only one person had been employed by the Club and his employment ceased on 31 August 2009.

(3)        All payments of tax and NIC due in respect of that employee were made on time.

(4)        HMRC issued the Club with an Employer Notification on 10 January 2010 requiring the submission of its 2009-10 P35 online by 19 May 2010.

(5)        The Club’s treasurer who, was under the impression that, as the Club no longer employed anyone it was not necessary to submit a P35 for 2009-10, resigned in March 2010.

(6)        On 27 September 2010 HMRC issued the Club with a penalty notice in the sum of £400.

(7)        The Club’s appeal against the penalty was received by HMRC on 2 November 2010.

(8)        HMRC rejected that appeal in a letter to the Club dated 29 March 2011 stating that “it is the responsibility of the employer to ensure that the P35 is correct and submitted on time. To date the P35 has not been received.”

(9)        HMRC’s letter of 29 March 2011 also offered the Club a review of the decision to reject the appeal against the penalty.

(10)     On 5 November 2011 the Club accepted HMRC’s offer of a review on the basis of the facts referred to above (in (1) – (3) and (5)). In addition the letter stated that had it been aware of a penalty in May the Club would have paid the sum due “without dispute.”

(11)     The Club was notified of the outcome of the review, which upheld the decision of HMRC to impose a penalty, in a letter dated 18 May 2011.

(12)     On 2 June 2011 the Club appealed to the Tribunal on the following grounds:

(1) This small, part-time charitable organisation (which does not have internet access) only had one employee for whom tax and NIC were payable. These sums were regularly paid until he ceased to be employed on 31 August 2009;

(2) In March 2010, the then treasurer resigned and was under the impression that no further action was required as the Club no longer had employees;

(3) Nothing was heard from HMRC until September 2010 when we were informed that £400 in late fees [ie the penalty] was due;

(4) We queried that sum on the grounds that we consider that HMRC should have warned us sooner than four months after the due date. We paid £100 in acceptance of the late fee, but appealed against the additional £300;

(5) This appeal has been denied, hence to application for [the] Tribunal decision

This may seem to be a claim for what is a fairly insignificant sum but the Duns Club is struggling to survive in the present financial climate with an elderly and rapidly dwindling membership. £400 would greatly help its finances and loss of this sum would only increase the possibility of this charitable organisation having to close its doors with the subsequent loss to the Duns community of an important social facility.

We do not dispute that we were in error in not filing the necessary document in time and have already paid £100 for that error.

We are requesting that on this occasion the remaining balance claimed by HMRC should be waived.

(13)     On 14 June 2011 the Club filed its 2009-10 P35 online.  

Law

(a)        the tax year to which the return relates,

(b)        the total amount of the relevant payments made by the employer during the tax year to all employees in respect of whom the employer was required at any time during that year to prepare or maintain deductions working sheets, and

(c)         the total net tax deducted in relation to those payments.

JOHN BROOKS

TRIBUNAL JUDGE

RELEASE DATE: 15 NOVEMBER 2011