Tuesday, 10 July 2018

Revenue Arguments Against Penalty Quashing Condemned by Tribunal

A bit more law for you on how HMRC tax penalties may be overcome. And if you like what you read then grab http://www.breakinglaw.co.uk/2018/06/tax-penalties-may-be-unlawful-latest.html and you might just want to buy my book at the same time so that I can afford to pay my tax bill due at the end of this month).

You thought that ignorance of the law was no defence, didn't you? Well it sort of might be when we come to whether you have a reasonable excuse for not paying tax penalties. That was made clear by the Upper Tribunal of the Tax and Chancery Chamber (it wasn't my idea to call them that!) in Perrin v Commissioners for HMRC [2018] UKUT 156 (TC). If the excuse was objectively reasonable then it might lead to penalties being quashed. The Tribunal said that some requirements of the law were well-known, simple and straightforward but others were less so. It would be a matter of judgment for tax tribunals in each case whether it was objectively reasonable for a particular taxpayer to have been ignorant of the requirement in question and for how long. 

HMRC was also condemned for its habit of putting forward arguments that an excuse had to be based on some unforeseeable or inescapable event or an unexpected or unusual event. That was not the law. In future cases where these arguments were trotted out, HMRC might be ordered to pay the costs of a taxpayer who had successfully appealed against penalties.