First-tier Tribunal (Tax)

[2014] UKFTT 0136 (TC)

TC03276

Appeal number: TC/2013/07115

PAYE – LATE LODGING OF EMPLOYER’S ANNUAL RETURN – AGENTS BELIEVED RETURN HAD BEEN SUCCESSFULLY FILED –WHETHER REASONABLE EXCUSE - NO – APPEAL DISMISSED

FIRST-TIER TRIBUNAL

TAX CHAMBER

The Tribunal determined the appeal on 20 January 2014 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 16 October  2013 (with enclosures), and HMRC’s Statement of Case submitted on 15 November 2013(with enclosures).

© CROWN COPYRIGHT 2014

                                                         DECISION

1 The appellants  appeal against the decision of HMRC to impose a penalty of £100  in terms of Section 98A (2) and (3) of the Taxes Management Act 1970,  for late submission of the Employer’s Annual Return for the tax year ending  5^th April 2011. The Annual Return was to be filed online by  19^th May 2011.  It was filed online on 3 October 2011. As the total duty shown on the return was less than £100 HMRC on 6 October 2011 reduced the penalty  from £400 to £100.  

2. The appellants agents say that the return was filed online on 19 May 2011. They had subsequently learned that it had been rejected by HMRC but had received no notification of this and were unaware of it until the penalty notice was received in September 2011.  They were able to successfully file the return containing the same details in October.   

 3. HMRC note that the appellants had been filing returns online since the end of the 2008 tax year so  are clearly aware of their tax obligations. There is no record of a return being received from the appellants prior to October 2011. They say that when an attempt is made to file a return online one of two messages is sent – one confirming successful filing and the other rejecting it. In the absence of one or other of these messages it was unreasonable for the appellants or their agents to assume that the return had been successfully filed. They conclude that the appellants have not established that on a balance of probabilities there is a reasonable excuse for their failure to file their return on time.

4.  I have given careful consideration to the evidence   put before me. If a person is to rely on reasonable excuse, this must have existed for the whole of the period of default. A reasonable excuse is normally an unexpected or unusual event, either unforeseeable or beyond the person’s control, which prevents him from complying with an obligation when he otherwise would have done. The matter has to be considered in the light of the actions of a reasonable prudent tax payer exercising foresight and due diligence and having proper regard for his responsibilities under the Taxes Act.  

5. The appellants were under an obligation to file their return on time and failed to do so. I accept that they tried to do it and had assumed that what they had sent had been received by HMRC but it seems to me to be reasonable when filing a return online to check that it has been received by HMRC. It is clear from the guidance that a message is sent. In these circumstances I find that the appellants have not established that they have a reasonable excuse for their failure to file the return on time..

6. I dismiss the appeal.

7.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.

N A BAIRD

TRIBUNAL JUDGE

                                        RELEASE DATE: 28 January 2014