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Accessible legal tips, know-how and news for anyone with a complaint or legal issue from Stephen Gold, author of The Return of Breaking Law, the book

Sunday 4 June 2017

Taxpayers Victorious

I realise that it was only the other week that you had your handkerchiefs out for the tax man (see http://www.breakinglaw.co.uk/search/label/tax%20penalties). Bad news. You need them out again. Tissues will do. 

In a series of more appeals to the First-Tier Tribunal of the Tax Chamber, penalties have been cancelled on the grounds that the taxpayer had a reasonable excuse fior being late doing what had been required of them. Many taxpayers lose appeals  but in two of the successful appeals we will have a look at, the Tribunal was mainly on the taxpayer's side.

In Hindocha v HMR&C [2017] UKFTT 0373 (TC) the Revenue accepted that serious mental illness could be enough to excuse lateness but it went on to argue that where the illness was an ongoing condition the taxpayer should make arrangements for sending in their tax return on time. The Tribunal decided that the taxpayer had suffered from a serious mental  illness which had been ongoing for four years in the form of depression, anxiety and panic attacks. And it went on to decide that it had affected the taxpayer in such a way that he had been unable to arrange for somebody else to get his returns in for him. He had found it impossible to get his menial day to day activities sorted, let alone his finances and taxes. He won his appeal and penalties totalling nearly £1,500 were quashed.

The taxpayer secured the cancellation of a £400 penalty but suffered the the upholding of a £100 penalty in Islam trading as Zainub Takeaway v HMR&C [2017] UKFTT 0337 (TC) so his appeal was well worth the trouble. His tax return went in more than three months late. The Revenue's practice is to penalise on a daily basis if a return is more than three months late. That's where the £400 came in. However, the Revenue came a cropper because it failed to establish that the notice of this penalty it sent out to the taxpayer had specified the date from which it was payable. The £100 stood as although the taxpayer did not speak very good English and his understanding of written English was poor, he knew of his responsibilities. He had engaged an accountant to help him in the previous year but failed to do so for the year in issue. He did not have a reasonable excuse for his default.

PS The Waitrose carpark clock was five minutes late yesterday! See