First-tier Tribunal (Tax)

[2015] UKFTT 122 (TC)

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TC04327

Appeal number: TC/2013/02717

Income Tax – Penalties – delay in filing SA Return – whether reasonable excuse – No – whether special circumstances – No – Finance Act 2009, Schedule 55 – Appeal dismissed

FIRST-TIER TRIBUNAL

TAX CHAMBER

Sitting in public at Manchester on 19 February 2015

Appellant – in person

Respondents – Mrs Helen Roberts, Officer of HMRC

© CROWN COPYRIGHT 2015

DECISION

1.             In this appeal the appellant, the taxpayer, represented himself with assistance from his wife.  The respondents, HMRC, were represented by Mrs Roberts.

2.             Mrs Roberts agreed to open the proceedings by setting out HMRC’s arguments, so focussing attention on those aspects on which the appellant should respond.  In the event the issues for the Tribunal to determine were whether the appellant had a reasonable excuse during (any part of) the period of delay in submitting his Tax Return and whether any special circumstances justifying the mitigation of penalties by HMRC were present.  There was no dispute about the length of the delay in filing the Return or in the calculation of penalties.

3.             The appellant failed to file timeously his Self-Assessment Return for 2010/11.  It was filed electronically on 13 August 2012.  An electronic Return would have been due on 31 January 2012 (a “paper” Return would have been due earlier on 31 October 2011).  Accordingly the Return was over six months late, and three penalties were imposed, viz an initial late-filing penalty of £100, daily penalties for 90 days totalling £900, and a “six month” late filing penalty of £300.  Accordingly I had to consider particularly the appellant’s circumstances during the period from January to August 2012.

4.             The factual narrative was not in dispute.  The appellant is a plumber and gas-fitter and was self-employed until late 2010.  Thereafter he was unemployed for several months.  He claimed Job Seekers Allowance from December 2010 to April 2011.  He was employed briefly during that month but was again unemployed and in receipt of Job Seekers Allowance until July 2011.  He then obtained employment with Lovell Partnerships Limited as a gas service engineer, and he has continued in full-time employment to date.  During 2012, therefore, the appellant was in full-time employment.  In his Grounds of Appeal and in a letter dated 18 February 2013 (copy produced) the appellant referred to an earlier period when he was beset by serious personal difficulties.  His mother had been diagnosed with breast cancer in June 2009 and required an extended period of treatment into 2010.  To compound this upset his wife had a molar pregnancy diagnosed in 2010 for which she required treatment until about May 2012.  Clearly, the appellant’s life and routine were in turmoil during the 2009-2011 period and he was pre-occupied in caring for and generally supporting them both.  However, although his wife’s treatment continued into 2012, at that stage he was able to work full-time and the pattern of his life had returned to a reasonable stability.

5.             In her concluding submissions Mrs Roberts argued that there was neither a reasonable excuse nor special circumstances which might serve to mitigate the penalties.  During the critical period of the delay, viz January-August 2012 the appellant was in full-time employment.  These concepts are strictly interpreted and in her view, while the appellant would have remained concerned about his wife and mother then, that concern did not meet the necessary criteria.  An insufficiency of funds does not specifically amount to a reasonable excuse.  Some exceptional factor or unforeseeable event throughout the material time might qualify.  No such exceptional factor was present here, and neither a reasonable excuse nor special circumstances had been demonstrated.

Decision

6.             The penalty here is significant, some £1,300.  In fact Mrs Roberts advised the Tribunal that no tax was in fact due by the appellant for 2010/11.  Nonetheless, there is a duty to file a tax Return.  The appellant should have been aware of this.  Mrs Roberts produced a record of the issuing of the Return and copy correspondence from HMRC warning of the consequences of delay.  (This was considered recently in HMRC v Donaldson [2014] UKUT 536 (TCC).  While I accept that the appellant was in the immediately preceding period pre-occupied with concerns for his wife and mother (and these then might possibly have excused a failure then), that acute period preceded 2012.  By 2012 the appellant was able to undertake full-time employment.  I am not satisfied that during the months January-August 2012 (or any part thereof) the appellant had a reasonable excuse for his delay.  Nor do I consider that there are special circumstances justifying mitigation of the penalties.

7.             While I am sympathetic to the appellant, and note that in fact no tax was due by him, for the reasons stated I have to confirm the penalties imposed of £1,300 and dismiss this Appeal.

8.             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.

KENNETH MURE

TRIBUNAL JUDGE

RELEASE DATE: 17 March 2015