In HMRC v Priory London Limited and HMRC v Jocoguma Properties Ltd [2022] UKUT 00225, the Upper Tribunal (UT) overturned controversial decisions on ATED late filing penalties as such confirming that HMRC is entitled to notify schedule 55 late filing penalties retrospectively.

Both companies, Priory London Limited (Priory) and Jocoguma Properties Ltd (Jocoguma) had notifiable properties and had filed their Annual Tax On Enveloped Dwellings (ATED) returns late.

Using its powers in Schedule 55 FA 2009 HMRC assessed Late filing penalties.

There is a requirement that HMRC give notice specifying the date from which the penalty is payable. This means that when a return is filed very late HMRC has to effectively backdate the notice given.

The returns for the first period were due on 1 October 2013

For example, Priory's returns for 2013 and 2014 were due on 1 October 2013 and filed in 2017. HMRC sent out penalty notices in 2017 stating:

  • Notices for a fixed penalty of £100, warning that, “If your tax return is more than three months late we will charge you a penalty of £10 for each day it remained outstanding for a maximum of 90 days from starting from 2 January 2014.
  • A daily penalty under paragraph 4 of Schedule 55 FA 09 in the maximum sum of £900, on the basis that the return was not filed for the full period of 90 days from 2 January 2014 to 1 April 2014;
  • A further fixed penalty of £300 under paragraph 5 of Schedule 55 FA 09, because the return was over six months late.
  • A further fixed penalty of £300 under paragraph 6 of Schedule 55 FA 09 because the return was over 12 months late.

Jocoguma was also late in filing its returns and was imposed similar penalties.

Both companies failed to persuade HMRC that they had a reasonable excuse for the late filing of their ATED returns.

They Appealed their penalty notices on technical grounds: whether the date to be specified in a notice under paragraph 4(1)(c) of Schedule 55 to the Finance Act 2009 from which a daily penalty under paragraph 4(1) is payable, can be a date prior to the date the notice is issued by HMRC.

The FTT found in the company's favour and HMRC appealed to the Upper Tribunal.

The UT examined past precedents and confirmed that it would be odd if penalties could not be notified retrospectively as HMRC would often not be aware that certain returns were due until they were finally made.

The UT overruled the earlier findings of the FTT, finding in HMRC's favour.


HMRC must sincerely hope that this decision, which sets a precedent, marks the end of the testing of Schedule 55 FA 2009 on technical grounds. 

Useful guides on this topic

Tax Appeals: How to appeal a penalty
How do you appeal against a tax penalty? What are your rights of appeal if HM Revenue & Customs (HMRC) have assessed you for a tax penalty?

 Annual Tax on Enveloped Dwellings (subscriber guide)
What is the Annual Tax on Enveloped Dwellings (ATED)? Who does ATED apply to? What relief is available and how is it claimed? What are the ATED return filing dates?

ATED: Tax Penalties
What penalties apply to the Annual Tax on Enveloped Dwellings (ATED) regime? When can they be charged? 

Adviser's Tax Penalty Planner
A guide to the key direct and indirect tax penalty regimes for returns and payments, excluding VAT.

External links

HMRC v Priory London Limited and HMRC v Jocoguma Properties Ltd [2022] UKUT 00225


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