In Pervez Akhtar v HMRC [2020] TC07545, the First Tier Tribunal (FTT) found that a taxpayer's excuse of 'bank error' was reasonable. It upheld the appeal against a penalty for failure to provide bank statements in response to an Information Notice from HMRC. 

  • During the course of its tax enquiries HMRC issued the taxpayer with an Information Notice under Schedule 36 FA2008. It included a request for bank statements covering a six-year period.
  • The taxpayer requested the statements from his two banks.
  • Santander failed to provide statements for 13 days of the first year. These were requested again and arrived late.
  • HMRC issued a Penalty for Failure to Comply with the notice.
  • The taxpayer appealed.

The FTT deduced that the taxpayer had done what any reasonable person would do on receipt of an Information Notice. He had contacted both Santander and Nat West at the same time and gave them the correct dates for the requested statements. It was only due to an error on Santander’s part that they did come back by the deadline.

The penalty was dismissed. Bank error was a reasonable excuse in the circumstances.

Comment

HMRC issued a penalty because the taxpayer did not provide sufficient explanation for his bank's failure. 

Useful subscriber links

Schedule 36 Information Notices
What is a Schedule 36 Information Notice? When can HMRC issue one? What rights does the taxpayer have when an information notice is issued?

Penalties for failure to comply with an Information Notice
What penalties apply if you fail to comply with an Information Notice request by HMRC? What are your rights of appeal?

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

External links

Pervez Akhtar v HMRC [2020] TC07545

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