First-tier Tribunal (Tax)

[2017] UKFTT 357 (TC)

TC05831

 

Appeal number: TC/2013/06932

 

Income Tax - Individual Tax Return - Late filing Penalty - Daily Penalties - Reasonable Excuse - No- Appeal Dismissed

 

 

FIRST-TIER TRIBUNAL

TAX CHAMBER

 

 

 

	MISS CATHERINE HOOPER	Appellant
	- and -
	THE COMMISSIONERS FOR HER MAJESTY’S	Respondents
	REVENUE & CUSTOMS

 

 

 

TRIBUNAL:

JUDGE JENNIFER A TRIGGER

 

 

 

 

 

The Tribunal determined the appeal on 18 April 2017 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 4 October 2013 (with enclosure) and HMRC’s Statement of Case (with enclosures) acknowledged by the Tribunal on 21 February 2017.

 

 

 

 

 

© CROWN COPYRIGHT 2017

 

Decision

 

 

Introduction

 

1.              This was an appeal against a Late Filing Penalty (the “Penalty”) and Daily Penalties (the ”Penalties”), imposed under Paragraph 3 and Paragraph 4, of Schedule 55 Finance Act ( the “FA”) 2009  for the late filing of an Individual Tax Return, for the year ending 5 April 2012

2.              The First-tier Tribunal directed that the appeal should be stood over until the decision of the Court of Appeal in the case of Donaldson v Commissioners for Her Majesty’s Revenue and Customs [ 2016 ] EWCA Civ. 761 ( the “Donaldson case”) was finalised. Thereafter, the Supreme Court refused to permit any further appeal in the Donaldson case and accordingly, the Appellant’s appeal was listed for determination.

3.              On 18 April 2017 the Tribunal decided that the appeal was unsuccessful.

Background Facts

4.              For the year ending 5 April 2012 Miss Catherine Hooper (the “Appellant”), was required to file a return either electronically by 31 January 2013 or non-electronically by 31 October 2012. The Appellant chose to file electronically, the return was received by HMRC on 12 June 2013.

5.              As the return was not received by the filing date HMRC issued a notice of penalty assessment on or around 12 February 2013 in the amount of £100.00, the Penalty.

6.              As the return had still not been received by HMRC three months after the penalty date, HMTC issued a notice of daily penalty assessment on or around 25 June 2013 in the sum of £430.00.00, the Penalties, calculated at the daily rate of £10.00 for 43 days.

7.              The Appellant appealed against the Penalty on 21 June 2013, HMRC rejected the appeal by letter dated 9 July 2013 but offered a review. The Appellant requested a review the result of which was sent to the Appellant by letter dated 13 September 2013. The outcome of the review was that HMRC’s decision was upheld.

8.              Thereafter, the Appellant appealed the Penalty and the Penalties to H M Courts and Tribunals Service by Notice of Appeal dated 4 October 2013.

9.              The Appellant accepted that the return for the tax year 2011-2012 was filed late but maintained that there was a reasonable excuse.

Findings of Fact.

10.           That the Appellant had filed the return for the tax year 2011 2012 late.

11.           That HMRC had correctly calculated the Penalty and the Penalties.

12.           That the Appellant had failed to establish a reasonable excuse.

13.           That HMRC had made a decision required by Paragraph 4 (1) (b) of Schedule 55 FA 2009 to charge the Penalties.

14.           That HMRC had given notice required under Paragraph 4 (1) (c) of Schedule 55 FA 2009 specifying the date from which the Penalties were payable.

15.           That HMRC had failed to specify the period in respect of which the Penalties were assessed in the notice of assessment required under Paragraph 18 of Schedule 55 FA 2009. Despite that omission of the correct period, for which the Penalties had been assessed in the notice of assessment, the validity on the notice was not affected.

16.           That the Penalty and the Penalties were not criminal in nature for the purpose of Article 6 of the European Convention on Human Rights (the “ ECHR.”)

17.           That the Penalty and the Penalties, were not disproportionate and the penalty regime was proportionate in its aim.

18.           That there were no special circumstance which would support a Special Reduction under Paragraph 16 of Schedule 55 FA 2009.

The Legislation

19.           Taxes Management Act 1970 section 8.

20.           Schedule 55 FA 2009 Paragraphs 1, 3, 4, 5, 6(1), 6(5), 16, 18, 20, 21, 22 and 23.

Reasons for the Decision

21.           The Appellant claimed as a reasonable excuse that she had accessed the HMRC online Employment Status Indicator, which showed, on the basis of the information supplied by the Appellant, that she was an employee and not self – employed. The Appellant believed, also, that as her earning were low she was not liable to pay tax and was not required to complete a tax return.

22.           As the Appellant had been registered for Self- Assessment since 2005 the Tribunal were of the view that she would have been aware of her obligation to file returns by the due date. The fact that the Appellant appeared to be unaware of her legal obligations did not relieve her of the responsibility to file her tax return. There was available to a tax payer a wealth of information provided by HMRC which the Appellant could have accessed. This information was published in public notices, on HMRC’s website and via a telephone helpline. In addition, a flyer was enclosed with all 2010-2011 tax returns and notices to file issued in April 2011. The Appellant had failed to make adequate inquiries and this could not amount to a reasonable excuse, which must be a factor that was unforeseen or exceptional or outside the Appellant’s control.

23.           As the return was late the Penalty was calculated under Paragraph 3 of Schedule 55 FA 2009 which specified the amount as £100.00.  The Penalties were calculated under Paragraph 4 of Schedule 55 FA 2009 at £10.00 per day. The return was filed 43 days late.

24.           The Tribunal had no power to discharge or adjust a fixed penalty which is properly due and was bound by the decision in Hok Ltd v Revenue and Customs in this respect.

25.           The Tribunal was bound to follow the decision in the Donaldson case in respect of the decision by HMRC to impose the  Penalties  and the giving of notice in respect of thereof and similarly relied on the Donaldson case on the issue of HMRC’s omission to specify the relevant period.

26.           The failure to file the return was not criminal in nature but administrative and no proof of qualitative misconduct was required. The Penalty, the Penalties and the 6 Month Penalty were simply a means of securing the production of timely returns. So Article 6 of the ECHR did not apply.

27.           The Penalties were neither harsh nor plainly unfair. The Tribunal relied on International Roth GmbH v SSHD [2002] EWCA Civ 158 in reaching this decision.

28.           There were no exceptional, abnormal or unusable circumstances nor was there something out of the ordinary run of events to justify a Special Reduction. Furthermore under Paragraph 16 (2) of Schedule 55 FA 2009 does not include as Special Reduction an inability to pay.

31 For the reasons given the appeal was not successful. The Appellant must pay to HMRC the sum of £530.00.

32 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.

 

 

JENNIFER A TRIGGER

TRIBUNAL JUDGE

 

RELEASE DATE: 27 APRIL 2017

 

© CROWN COPYRIGHT 2017