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In B Humphreys Building Construction Ltd v HMRC [2019] TC7289 the First Tier Tribunal dismissed an appeal against corporation tax return late filing penalties; reliance on an adviser and software issues were not a reasonable excuse for a third successive late return.

A taxpayer may appeal a tax penalty when they are able to prove that they have a reasonable excuse for not doing what they are supposed to do.

The company filed its corporation tax return for the year ended 30 June 2017 over 8 months late and received flat rate late filing penalties of £1,000. There was no tax liability due for the period.

The judge said primary responsibility for the company’s tax filing obligations is with the company and reliance on a third party does not constitute a reasonable excuse, pointing out that this was the third time the company had failed to file its return on time despite the timely filing of its accounts with Companies House for the same three periods. The company should have had back up arrangements in place and the fact that they did not suggested that they did not exercise the care and foresight expected of a company adhering to its responsibilities under the Companies Act.

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B Humphreys Building Construction Ltd v HMRC [2019] TC7289