Late filing excuses not reasonable

In Onuchika Eleonu v HMRC [2023] TC8726, the First Tier Tribunal (FTT) dismissed an appeal against penalty notices. None of the excuses offered for the taxpayer's errors were 'reasonable'.

• Ms Eleonu was an Agency Worker employed through an Umbrella Company.
• She was issued with a notice to file a Self Assessment tax return for the year ended 5 April 2020. This was received.
• In November 2020 the appellant visited the Citizen’s advice bureau to obtain assistance with her tax affairs.
• HMRC issued Late Filing Penalties including daily penalties.
• The appellant filed a notice of Appeal in November 2021

The FTT found:

• The penalties were due, the appellant did not have a Reasonable Excuse for late filing. Her excuses included:
• • Claiming to have submitted the tax return. HMRC had no record of this and she could provide no evidence of submission.
  • Ignorance of the process required to complete a Tax Return.
  • The legality of HMRC issuing a tax return to a taxpayer who is subject to payroll.
  • Her change of address happened after she had received the notice to file.
  • Her claim that she had received legal advice that she did not need to file was without evidence.
  • No evidence was provided to justify claims that illness may have constituted a reasonable excuse.

The appeal was dismissed.

Comment

• HMRC have the power to withdraw a Notice to file a tax returns if they are not required.
• If a tax return is withdrawn any associated penalties are removed without the need to appeal. While this is only likely to be applicable where taxpayers do not meet the general it is certainly worth exploring.
• See:  How to appeal a tax penalty (subscriber version)

Useful guides on this topic

S.8(1) Notice to file a tax return
This guide examines the implications of a notice sent to an individual under s.8(1) TMA 1970 to file a tax return.

Penalties: SA late filing, payment, notification & error
Self Assessment (SA) tax penalties: what penalties are due for outstanding tax returns? What penalties are due for late payment? Are there special rules for COVID-19 delays?

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

Grounds for Appeal: Reasonable excuse
What is considered to be a 'reasonable excuse' when a taxpayer makes an appeal against a tax compliance failure?

Grounds for Appeal: Reasonable excuse (freeview)
What is a 'reasonable excuse' in terms of making an appeal against a tax penalty for late filing, late payment or error?

External links

Onuchika Eleonu v HMRC [2023] TC8726