Taxpayer's Appeal Against Late Filing Penalties Rejected

Taxpayers should always ensure that they keep up to date with their tax affairs and obtain any assistance they need in meeting their obligations. This point was demonstrated in a recent case in which the First-tier Tribunal (FTT) dismissed a taxpayer's appeal against late filing penalties amounting to £1,300.

The appeal related to penalties raised by HM Revenue and Customs (HMRC) under Schedule 55 of the Finance Act 2009 after the taxpayer failed to submit a self-assessment return for the 2021/22 tax year on time. The taxpayer did not join the hearing, which was held as a video hearing. However, the FTT was satisfied that reasonable steps had been taken to notify him of the hearing. Noting that adjourning the appeal would have an adverse effect on the resources of HMRC, the FTT and the taxpayer himself, the FTT was also satisfied that it was in the interests of justice to proceed.

The taxpayer's initial appeal to HMRC had been rejected as it had been made late. However, HMRC had not objected to the late appeal to the FTT, and the FTT decided to grant permission for a late appeal.

The FTT observed that the taxpayer's grounds of appeal were not entirely clear, but could be taken to say that he had not received a notice to file a return for the 2021/22 tax year. HMRC produced evidence which they said demonstrated that the notice had been sent to the taxpayer, but the FTT noted that previous cases had established that such forms of evidence were insufficient to prove that a notice had been sent. However, considering this together with evidence in the taxpayer's notice of appeal, his appeal against a late filing penalty in respect of the previous year's tax return, and HMRC's records of his telephone calls to them, the FTT found that the notice had been sent to him on or about 6 April 2022. The FTT also found that the penalty notices had been sent to the taxpayer, using the email address he had instructed HMRC to use. The penalties were correctly calculated and were, on the face of it, due.

In view of the FTT's findings that the taxpayer had been sent the notice to file a return and the penalty notices, any assertion that he had not received them could not amount to a reasonable excuse. In his appeal in respect of the penalty for the 2020/21 tax year, he had stated that he was aware of the need to submit tax returns going forward. The FTT was therefore unpersuaded that he had mistakenly believed he did not need to submit a return for the 2021/22 tax year, and observed that such a belief would not objectively amount to a reasonable excuse.

The taxpayer had also claimed that he had assumed he was not required to submit tax returns because he had been made redundant in late 2022. However, the FTT noted that being made redundant in the 2022/23 tax year could not cause a reasonable taxpayer to conclude that they did not need to submit a return for the previous tax year.

The FTT concluded that the taxpayer did not have a reasonable excuse for filing his tax return late and dismissed the appeal.