In Tarrant Howl Ltd v HMRC [2018] TC06788, the FTT concluded that it was unreasonable to expect an employment intermediary to realise that it was required to file a nil return: HMRC's webpages on the topic were complex and invisible and the appellant would not have understood them.

  • Since 6 April 2015 there has been a quarterly reporting regime under which agencies and Employment intermediaries (specified employment intermediaries “SEI”) must report details of payments made to workers who are treated as self employed and not taxed under PAYE. 
  • Late filing penalties under Schedule 55 FA 2009 apply to late returns.

Late filing penalties totalling £750 were issued for failure to file two nil returns.

The company had no self-employed workers for the periods in question and assumed that “like VAT” if a return was required they would be notified.

HMRC said that the information on the website “clearly” shows that an agency must file a nil report.

The company appealed

The tribunal judge reviewed all of the guidance pointed to by HMRC as well as the relevant HMRC manual and concluded that even if the appellant had attempted to check the nil return position for themselves, it was not immediately obvious how they would even have found the webpages that HMRC referred to, whether or not they were clear; in his view they were complex and invisible and the appellant would not have understood them. As a result they had a reasonable excuse for failing to file the returns.

Useful guides on this topic:

Agency Workers: employment intermediaries rules (subscribers) 
What is an employment intermediary and what are the rules?

Appeals: grounds for appeal toolkit 
It's vital to understand and correctly state your grounds for appeal

Grounds for appeal: taxpayer reasonable excuse
What is a reasonable excuse and why is it important to consider whether you have one?


Leverton Search Ltd v HMRC [2018] TC06786 

Tarrant Howl Ltd v HMRC [2018] TC06788