In Alexander Steele v HMRC [2018] TC06717, the First-Tier Tribunal (FTT) cancelled HMRC’s late filing penalties relating to 13/14, 14/15, and 15/16. There was no legal requirement to notify HMRC of a change of address  and no legal requirement to file a return just because he was a Director.

  • HMRC sent the taxpayer SA316 notices to File a Self Assessment return for three years.
  • The notices were sent to the taxpayer’s parents’ address and these were not picked up.
  • The returns were filed late
  • HMRC assessed Schedule 55 Late filing penalties of £100 for each of the three years.
  • The taxpayer claimed that he had a reasonable excuse for his lateness and appealed the penalties.

The FTT found that:

  • The taxpayer is not legally obligated to tell HMRC his address has changed as he only had PAYE income in the tax years in question. His employer would have been submitting information with his current address to HMRC.
  • HMRC had issued SA 316s notices to file however there was no legal requirement for the director to file a return, he was under PAYE and a basic rate taxpayer. HMRC was bringing the taxpayer into self assessment merely to collect a PAYE debt.
  • The taxpayer could not have known a Tax Return was required until he saw the notices after the deadline had already passed.
  • A special reduction to the penalties could also be applied as in having three late filing penalties assessed at once the taxpayer had no way of learning by his mistakes. See Grounds for Appeal: Taxpayer reasonable excuse

The FTT decided that the taxpayer had a Reasonable excuse for not filing the returns on time.


Directors: Do I need to filed a tax return

Grounds for Appeal: Taxpayer reasonable excuse

External link 

Alexander Steele v HMRC [2018] TC06717

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