In Legends Leisure Ltd V HMRC [2020] TC07795, the First Tier Tribunal (FTT) held that the three penalties totalling £600 and issued for failure to file three PAYE Real-Time Information (RTI) returns on time were valid.

The appellant made a late appeal against the penalties, which HMRC accepted and also a late notification of the appeal to the Tribunal, which was also accepted.

  • Relevant payments were made to employees on or before an RTI return was made.
    • During the first period ending 5 November 2019, the return was submitted six days after the payments to employees.
    • At the second period ending 5 December 2019, the return was submitted 13 days after the payment to employees.
    • The third period ending 5 January 2020 saw the return was submitted 12 days after the payment to employees.
  • In the period ending 5 November 2019, there had been seven defaults in that tax year, of which appeals against penalties were accepted by HMRC.
  • The employer had notified HMRC that the administrator's mother had dementia, which affected her work and ability to submit returns on time. Her mother’s dementia was so serious that the administrator was no longer able to carry on with her duties.
  • The business ended up contracting another individual to handle the PAYE work.
  • The appellant was not disputing that the penalties issued were incorrect nor was there any dispute that the penalties had not been received.

The FTT needed to establish:

  • Whether the notifications and issue of penalties were properly assessed by HMRC.
  • Whether the appellant had either a reasonable excuse or special circumstances to not be liable to the penalties issued.

The FTT found:

  • HMRC had properly assessed and notified the appellant of the penalties.
  • The Judge, along with HMRC, sympathised with the appellant’s situation and whilst HMRC had been generous previously with appeals it was clear that the business had known for some time that there were issues facing its capacity to submit RTI return on time.
  • The appellant has no reasonable excuse on the basis that the business did not put in place a regime to ensure the returns were filed on time.
  • The case had no special circumstances.
  • The appeal was dismissed.


Penalties: RTI (Real-Time Information) for PAYE
RTI reporting became compulsory for most employers on 5 April 2013; some big employers joined the regime in April 2012.

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?

How to appeal an HMRC decision?
What type of decision can you appeal? What are your different options when you disagree with HMRC? What are the key steps in making an appeal?

External link

Legends Leisure Ltd V HMRC [2020] UKFTT313 TC07795