In Fastklean Limited v HMRC [2020] TC2004, an employer who filed Employment Intermediaries Returns to please HMRC was successful in claiming reasonable excuse for late filing. Tax counsel had advised that no returns were due.

The First Tier Tribunal (FTT) decided that there were two issues in this case:

The FTT did not consider that it had been provided with sufficient tangible evidence to satisfy itself on the issues of supervision, direction or control. As a result, it could not decide whether a filing exemption applied in respect of the intermediaries returns. 

In terms of reasonable excuse, the FTT found that the taxpayer was entitled to rely on the tax advice it was given that returns were not required as this was later endorsed by legal advice. That was a reasonable thing to do.

The appeal was allowed.


How daft was that? The UK's PAYE rules are so difficult to interpret that no one in the case could agree whether Employment intermediaries return were actually required. 


Agency Workers: At a glance
Freeview summary of the rules

Agency Workers: Employment Intermediaries
A handy summary of the rules and filing requirements for agencies and other intermediaries, including a PAYE reporting tool and details of filing requirements.

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?

Grounds for appeal: Taxpayer reasonable excuse 
What is considered to be a 'reasonable excuse' when a taxpayer makes an appeal?

Supervision, direction or control (SDC)
There is no legal definition of the meaning of SDC

External link

Fastklean Limited v HMRC [2020] TC2004