In J Cooney (as representative partners of Citygate Partnership) v HMRC [2017] TC05950, the First- Tier Tribunal (FTT) agreed that the partnership had a reasonable excuse for the late return and HMRC should have given a special circumstances reduction as they had the individual partners’ returns.

  • The Partnership submitted its 2011/12 return on time in October 2012.
  • HMRC returned the form with a request for further information which was provided two weeks later, on 22 December 2012.
  • HMRC claimed they sent the return back again on 10th January 2013, the partnership and Agent denied receipt.
  • HMRC issued a penalty in February 2013. The agent wrote to them to explain the return had been filed and believed the matter to be closed.
  • In June 2013, the agent identified that HMRC believed there was information outstanding. A duplicate partnership return was submitted in July 2013.
  • A second ‘six months’ Late Filing Penalty was issued along with daily penalties in August 2013 for the period up until the return was received in July.

The partnership made an Appeal to the FTT. The Grounds for Appeal were on the basis that they had a Reasonable Excuse or that special circumstances applied.

The FTT concluded that HMRC had not sent back the return:

  • No proof was supplied nor any copy of the correspondence supposedly sent.
  • The information provided to the FTT showed that a return was received and its summary listing stated that it had a paper return deferral date of 3 January 2013, which was consistent with the 22 December date on which the return was resubmitted.

This meant that the partnership had a reasonable excuse, as they could not possibly know that information was outstanding if HMRC had never sent them a request.

The FTT then moved on to consider when the reasonable excuse ended, as one must act without unreasonable delay from the cessation of the reasonable excuse in order to rely upon it:

  • They found that the agent had been in contact with HMRC from the date the first penalty was issued.
  • The date of the first penalty was the earliest date at which the taxpayer could have become aware of the problem.
  • The agent corresponded with HMRC on the matter until June 2013.
  • The reasonable excuse therefore ended in June 2013.
  • The return was filed in July 2013, which was said to be within a reasonable time of the excuse ceasing.

Finally, the FTT commented on the fact that HMRC did not consider there to be special circumstances:

  • Special circumstances are either:
    • Uncommon or exceptional, or
    • Where the strict application of the penalty law produces a result that is contrary to the clear compliance intention of that penalty law.
  • It was clear that HMRC had only considered the first of these tests.

The FTT concluded that, even if there was not a reasonable excuse, the special circumstances would require that the penalties would be reduced to nil in any case.


Another case that considers the clear compliance intention of penalties, see How to appeal a tax penalty (subscriber version) for further cases on this topic.


Grounds for appeal: Reasonable excuse

Appeal: grounds for appeal

How to appeal a tax penalty (subscriber version)

Penalties: late filing

External link

J Cooney (as representative partners of Citygate Partnership) v HMRC [2017] TC05950


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