In Vasco Properties Ltd v HMRC [2018] TC06801 the First Tier tribunal allowed an appeal against RTI late filing penalties; HMRC failed to show that the returns were late.

Under Real Time Information (RTI) for PAYE, a return of payments (FPS) must be filed each month. 

  • Late Filing Penalties apply if these are not filed on time (i.e. as or before payments are made).
  • A 3 day grace period introduced from October 2014 has been extended to April 2019.
  • The burden of proof is on HMRC to show that penalties are due.

Vasco Properties Ltd received notice of £200 in RTI late filing penalties which it appealed in February 2018:

  • In March 2018 HMRC sent a summary showing the penalty was for two late monthly submissions for December 2017 and January 2018, stating there was no Reasonable excuse.
  • Vasco requested a review and the penalties were upheld.
  • Vasco appealed to the tribunal; they provided documentation that the software used (HMRC basic PAYE tools) showed that:
    • the correct information was submitted for the correct periods.
    • they had done the same for 2016-17 with no issues raised by HMRC; it was later shown that HMRC had cancelled late penalties in 2017 under similar circumstances.
    • their 2017/18 submissions had been on time with no failed submissions but subsequently the software showed two “expired” submissions dated April 2017 where it had previously showed “success”.
  • The evidence produced by HMRC to show that the returns were made or delivered late was two printouts dated 1 August 2018 showing:

     “Number expected 1

      Number received 0

      Status Active”

  • HMRC said an “expired” status is very rare but can happen when there has been a previous successful submission.

The tribunal found that HMRC had not proved that the returns were made late and cancelled the penalties. 

The judge commented that HMRC, initially and in their statement of case, and via the review officer, had responded using standard letters on the basis that Vasco did not have a reasonable excuse. They did not appreciate, (and this was, he said, inexcusable), that this was not a reasonable excuse case; Vasco had not put forward an excuse as they believed there was no failure to excuse. 


RTI: Real Time information for PAYE

Penalties: RTI (Real Time Information) for PAYE 

Statutory Review

How to appeal a tax penalty

External link:

Vasco Properties Ltd v HMRC [2018] TC06801