In Heacham Holidays Limited v HMRC [2020] TC07883, the First Tier Tribunal (FTT) upheld fixed penalties imposed by HMRC for the late-filing of the taxpayer's Annual Tax on Enveloped Dwellings (ATED) return but discharged the daily penalties imposed as they were issued retrospectively without notice.

HMRC issued a series of penalties and notices including fixed and daily penalties for both years. The penalties were appealed and dismissed by HMRC but a review was offered and accepted. The review decision was as follows:

Heacham appealed the decision on the following grounds:

HMRC disputed the use of ABF as they disagreed with the reasoning behind the decision. HMRC highlighted that para 4(3)(a) of Sch 55 states that the daily penalties can start on a date earlier than that of the notice of the penalties.

The FTT found:

The £100 penalty relating to 2017/18 had been paid and was not considered. The 2018/19 fixed penalties of £100 and £300 (paras 3 and 5 Sch 55) were confirmed and the daily penalties (para 4) of £900 were discharged.


Annual tax on enveloped dwellings (ATED)
The Annual Tax on Enveloped Dwellings (ATED), originally called the Annual Residential Property Tax, is an annual charge on UK dwellings held by a non-natural person, e.g. a company.

Penalties: Annual tax on enveloped dwellings
Penalties for the Annual Tax on Enveloped Dwellings (ATED) regime fall under Schedule 55 FA 2009 (failure to make returns) and Schedule 56 FA 2009 (failure to make payment on time), together with Schedule 24 FA 2007 (penalties for errors).

Penalties: Late payment
What penalties are charged when tax is paid late? A guide for Subscribers

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?

External links

Heacham Holidays Limited v HMRC [2020] TC07883

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