In Claire Shenstone, Georgina White, Henry White v HMRC [2019] TC7378 the First Tier Tribunal allowed late penalty appeals; reliance on incorrect advice from HMRC was a reasonable excuse.

If you are out of time in appealing a tax penalty you can write to HMRC and ask if they will accept a Late Appeals if you have a Reasonable Excuse for your delay.

If HMRC denies your request you can apply to the tribunal who will allow a late appeal if it considers that:

  • You have a reasonable excuse for the delay, or
  • it is in the interests of justice to do so.

The taxpayers were a mother and her adult children, and partners in a partnership. They had fallen behind with their tax returns due to family illness and the death of their accountant. HMRC assessed them for  Late Filing Renalties for several tax years:

  • They made late appeals against the penalties.
  • Prior to the hearing HMRC accepted some of the late appeals and dismissed those penalties on the grounds  that they had no reasonable excuse but appeals relating to one tax year remained to be decided.
  • HMRC had advised Henry White, by documented telephone call, that the penalties could not be appealed until the returns had been filed.
    • At the point the penalties were issued the returns were still being prepared.
    • Appeals were quickly made after the returns were filed.
  • Georgina White’s record with HMRC had an incorrect address listed and letters had been returned to sender as a result.

The FTT judge allowed the late appeals in the absence of the taxpayers and their agent:

  • It was reasonable that reliance had been placed on HMRC’s advice that appeals could not be made until the returns had been filed.
  • The judge felt able to infer that one of the penalty notices was amongst Miss White’s returned mail; not receiving a penalty assessment was a very good reason for not appealing the penalty.
  • It was clear Mr White had passed on HMRC’s incorrect advice about not appealing the penalties until the returns had been filed to his sister and that it was reasonable that she had relied on this information.
  • The family illness and reliance on the now deceased accountant were not reasonable excuses for late appeals.

Links to our guides

Appeals: Grounds for appeal toolkit
What grounds are there to appeal a tax penalty? How can you word a tax appeal?Can you appeal HMRC errors? What is a reasonable excuse?

Appeals: Late
When can you make a late tax appeal? What conditions must be met?

How to appeal a tax penalty (subscriber version)
What are the steps in making an appeal? What should your appeal cover? What does recent case law say on this topic?

Penalties: Late Filing
What penalties apply for late filing? Which penaly will apply and when? 

External link:

Claire Shenstone, Georgina White, Henry White v HMRC [2019] TC7378

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