This week we are returning to one of my favourite topics: penalties and appeals. If you have looked at the FTT's decisions recently you will note that we are drowning in tax penalty cases.
The reason that we have so many more than usual is that many of the cases that were stayed pending the outcome of the Donaldson (daily late filing penalties) decision have been heard. Perusing the decisions, it is notable just how quickly large penalties wrack up under the current system and how many people claim that they have had technical problems: so many find it difficult to log in to HMRC.
Another thing to note is that both HMRC and taxpayers seem to have pretty consistent problems in case management, whether this is failing to provide evidence, such as a copy of an original assessment or the date on which a call was made, or failing to actually provide an excuse for your failure or for HMRC to consider whether there are any special circumstances that might have the effect of allowing a special reduction of a penalty. There is the question as to whether raising a penalty in whatever the circumstances is contrary to the clear compliance intention of penalty law. This is something that HMRC think they should consider according to their manuals, but how often is it actually mentioned in case decisions? Not often as it goes.
The Ministry of Justice are now beta testing a new digital appeals system. While this might make commencing the appeals process easier, it won't help you if you have failed to gather evidence to support your appeal. If you need help with an appeal do contact us.
Finally, with the rise of Artificial Intelligence (AI) it is rather sweet to reflect on the fact that our website is a fine example of Human Intelligence (HI). Of course in time we will be teaching our 'bots' all about tax, but currently the main advantage of HI is that we curate the content according to what we as a team find interesting at any point in time. Imagine what it will be like when all your tax content is sourced by machines based on what you last searched for in your browser? A terrifying thought.
Don't forget: share scheme returns and P11Ds are due by 6 July.
If you have any tax queries please do try out our Virtual Tax Partner support portal at www.VtaxP.co.uk
Enjoy the guides and updates and the news is below.
Nichola Ross Martin FCA Tax Director
Your Virtual Tax Partner®: online PRACTICAL support for accountants & tax advisers BY accountants & tax advisers
Quick news (freeview)
Last chance to respond to Making Tax Digital Penalty consultation
You have until 11 June 2017: email us if you have a point to make but no time to respond.
New online appeals service
The MOJ are beta testing
New advisory fuel rates from June
HMRC have published new advisory fuel rates for company car drivers which will apply from 1 June 2017.
Welsh LTT receives Royal Assent
The Welsh Land Transaction Tax (LTT) received Royal Assent on 24 May 2017.
Case Update (freeview)
Partnership penalty: HMRC decision flawed
ln Mrs R Rendall v HMRC  TC6011 the FTT decided to quash £3,200 of late partnership filing penalties. HMRC had all the correct information, had given incorrect advice on fililng: giving a penalty in such circumstances was clearly not the intention of the law.
OFT's money laundering penalty 'outrageous'
In Jackson Grundy Limited v HMRC  TC04981 the First-tier Tribunal (FTT) reduced a record breaking penalty for money laundering failures set by the former Office of Fair Trading.
Tax due on conversion of QCBs and non-QCBs
In Anthony and Tracy Lee Hancock v HMRC  EWCA Civ 198 the Court of Appeal found that the conversion of QCBs and a non-QCBs into a single new QCB should be treated as two separate conversions: tax was due on redemption.
Schedule 36 notice: statutory records and reasonably required
In New Way Cleaning Ltd v HMRC  UKFTT TC5769 the First-Tier Tribunal (FTT) considered statutory records and what is reasonably required for a Schedule 36 Notice relating to PAYE.
Editor's Choice (subscribers)
Penalties: grounds for appeal
This guide summarises some successful and unsuccessful grounds for appeal in relation to penalties and considers case law.
How to appeal a tax penalty
You may appeal against a decision of HMRC in different ways, depending on the type of penalty. If you don't appeal the right thing that tribunal may help you out but it depends on the circumstances. New cases on Special Reduction and special circumstances.
Eye tests and glasses
UPDATE: tax relief on employer provided tests and equipment
Companies: permanent establishment & residence toolkit
UPDATE: checklist, summary of the rules and key case law
Practical Tax Guides and Updates (subscribers)
IHT: gifts with reservation
UPDATED: More added on the exemption where a share of a property is gifted.
Sch 36 information notices (subscriber version)
UPDATED: For recent case law.
RTI: Annual Schemes
UPDATED: More information added and links to HMRC's current guidance
VAT update May 2017
A round of the latest developments
Making Tax Digital
Pricing for Accountants: Part 1
Introducing new models for MTD
Making Tax Digital: toolkit for accountants
UPDATE: Test ride the TaxkeepApp
Making Tax Digital: index
UPDATE: the latest news
New webinars on:
Making Tax Digital: practical issues for accountants
Getting ready for MTD: practical measures for the 2017/18 tax year.
How to create the MOST tax efficient practice...ever!
Highlights from Nichola's highly popular talk at Accountex 2017
Missed last time's update?
- VAT cases on hardship applications, hire of wedding rooms, and whether a recording studio was a business or a hobby.
- RDA avoidance scheme case.
- EIS deferral relief.
- Divorce and tax.
- VAT update.
- VAT traps when taking over a business.
- EC Sales Lists.
- SDLT: how to amend a return and when the higher rate applies.
- Sch 36 and 3rd party information notices.
- Starting in business.
- Incorporating a property business.
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