In David Goldsmith v HMRC [2018] TC06284, the First Tier Tribunal (FTT) held that no late filing penalties could be charged as the tax returns were issued for the wrong reason. 

NOTE: This decision was overturrned on a technical appeal to the Upper Tribunal.

When a tax return is issued by HMRC under s8(1) of TMA 1970 and filed after the due date, late filing penalties apply, under Schedule 55 of Finance Act 2009.

  • For 2011/12 and 2012/13, Mr Goldsmith received a small salary and Employment and Support Allowance (ESA), with full personal allowance given on both.
  • HMRC sent out forms P800 showing underpayments due and then issued tax returns to him in 2014 to enable the debt to be enforced.
  • Goldsmith appealed on the grounds that he had not received any notices to file or tax returns.

The FTT held that HMRC had issued the notices and, in the absence of a dispute about addresses, the onus was on Mr Goldsmith to demonstrate the Returns had not been received. He had not met this burden and so had no reasonable excuse for not filing the returns.

However, the FTT decided that the penalties were not valid because the Returns were not issued under s8(1) TMA 1970, but to create an enforceable debt. This was not an argument advanced by the taxpayer.

Alternatively, the FTT found that special circumstances applied and would reduce the penalties to nil on this basis:

  • HMRC already knew the correct tax due so did not need the actual return.
  • This being the case, the penalties would not assist in allowing HMRC to “know as soon as it can that the correct amount of tax … is payable”; their purposes could have been achieved by issuing a determination under s28C of TMA once the notice to file had been issued.


Initially this was a paper appeal, but the Judge (Richard Thomas) noticed the issue regarding s8(1)(a) above and invited further submissions. HMRC then requested a full hearing to address this, though the taxpayer did not attend. We discuss this point in more detail in our subscriber note How to appeal a tax penalty.

The full decision contains a brief history of PAYE, which may be of interest to the scholar.


David Goldsmith v HMRC [2018] TC06284