The first published decision on late PAYE penalties possibly creates more questions than it provides answers.

In Dina Foods TC 1546 a company was unsuccessful in its appeal against a £10,000 penalty. This was the first published decision covering new penalties under Schedule 56 FA 2009.

The company was habitually late in paying its monthly PAYE: during 2010/11 the company was between 4 and 84 days late on 11 occasions. It was charged penalties at the rate of 4% and it appealed the penalty notice. 

HMRC declined to accept the company’s excuses for late payment and the case went the Tribunal.

The company's argument 

HMRC's argument

The findings and decision of the Tribunal

The Tribunal found that it believed HMRC and that a reminder had been sent and that there were no mitigating circumstances. It confirmed the penalty.

Unanswered matters

The Tribunal did not consider the following matters, this is simply because they were not raised or argued:

Points worth considering on proportionality and fairness may include:

The Tribunal might have dealt with some of these points under its powers to consider the special circumstances rule as the new regime beds in but this time it was not asked to.

And finally, there is whole matter of Jussila v Finland [2009] STC 29 which is being raised regularly by one First Tier Tribunal Judge, Geraint Jones QC, who has heard the lion's share of appeals against tax penalties. 

Further reading:

PAYE late payment penalties buster
An essential guide for advisers: follow these simple steps and avoid thousands

Tax penalties: PAYE: late payment
The new regime explained and illustrated.


 

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