In George Edwards Consulting Limited v HMRC [2018] TC06760, the First-Tier Tribunal (FTT) found that overpaying PAYE is no reasonable excuse for filing your late P35.

  • The company had overpaid its PAYE for 2007/08 to 2009/10 and was owed £5,395 by HMRC.
  • The company filed its 2010/11 P35 more than 3 years late.
  • HMRC issued £1,200 of Penalties.
  • The company appealed the penalties.

The FTT found

  • Penalties were due: the company admitted it was late in filing the P35.
  • The company did not have a Reasonable excuse for its failure:
    • HMRC’s delay in repaying overpaid tax was not a reasonable excuse for filing the following year’s P35 late.
    • Considering the cost of paying an accountant to prepare the P35 as ‘not worth the expense’ was not a reasonable excuse. Particularly where compliance costs would have been significantly less than the penalties ultimately due in this instance.

The penalties were upheld.


Grounds for appeal: Reasonable excuse

Penalties: PAYE Annual Returns P35 & P14

External link

George Edwards Consulting Limited v HMRC [2018] TC06760