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.
Links
Grounds for appeal: Reasonable excuse
Penalties: PAYE Annual Returns P35 & P14
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