Hello,
In this time’s web-update we feature guides that aim to answer your last minute tax FAQs for Self Assessment (SA), carelessness by agents and, the Upper Tribunal (UT) finally resolves an important question: does a notice to file a SA return have to be issued by a human?
In terms of tax FAQs, we have had a few reader’s comments on our mini-guide ‘How to calculate the Higher Income Child Benefit charge’. I was checking out HMRC’s calculator; you need to be a bit careful using it, especially when it comes to pensions. Strangely, it also says that it is only ‘optional’ to claim allowable deductions.
Most people would never think to question the validity of a notice issued by HMRC to file a tax return however it is something that several First Tier Tax Tribunal judges have recently started questioning in the context of late filing penalty appeals. A key sticking point has been whether a notice to file a tax return has to be issued by an actual human at HMRC or whether HMRC can simply press a button and allow its software to generate such notices in batches. The UT has now stopped all such speculation and confirmed that the latter is acceptable. The slightly odd twist to this tale is that HMRC clearly did not think that this was the case as it has included draft legislation for the next finance bill to allow computers to a free hand in the automatic generation of such notices.
One final case to highlight this week is the John Hicks' ‘discovery’ appeal. The UT found that HMRC met the condition to make an out of time assessment due to the carelessness of the tax adviser. The adviser should have taken advice on the tax scheme promoted to his client when preparing a tax claim, and the scheme promoter was also careless in promoting something that did not work. Food for thought.
Back soon
Nichola Ross Martin FCA CTA (Fellow) Tax Director
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Quick news & Guides (freeview)
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When can HMRC raise assessments outside of normal time limits? What can you do to prevent one?
Case Update (freeview)
Discovery Assessment allowed: agent was careless in advising on tax scheme claim
In HMRC v John Hicks [2019] UT 0040, the Upper Tribunal (UT) allowed HMRC’s appeal finding there had been carelessness on the part of the taxpayer's adviser. The discovery assessments raised were in time, after all.
No 'flesh and blood' officer required to issue a s8 notice to file
In HMRC v Nigel Rogers and Craig Shaw [2019] UT 0406 the Upper Tribunal (UT) decided that a section 8 'notice to file a return' does not have to be issued by an identified “flesh and blood” officer of HMRC. The UT also provided guidance to the FTT on how to address any future concerns that it has on the validity of s.8 notices.
Employment intermediary return: penalties charged on wrong person
In Angela Salazar v HMRC [2019] TC7398, the First Tier Tribunal (FTT) allowed an appeal against employment intermediary return late filing penalties. They were raised against the wrong person and the taxpayer had a reasonable excuse.
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VAT Cases (freeview)
Cricket club issued wrong VAT certificate
In Westow Cricket Club v HMRC [2019] TC07484, the First Tier Tribunal (FTT) ruled that the Club did not have a reasonable excuse against a penalty for getting the zero-rating certificate wrong, after relying on a letter from HMRC.
Taxpayer suffers as HMRC changes views
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Virtual Tax Partner Toolkit (freeview)
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