In Paul Needham vs HMRC [2024] TC09342, the First Tier Tribunal (FTT) found that failure to receive ‘notice to file’ letters and a prolonged lack of engagement from HMRC, were not reasons to permit a late appeal.
HMRC believed Mr Needham had property income to declare and issued notice to file letters and Self Assessment returns covering four years to him at the address on their file.
Mr Needham was not living at the address to which the correspondence was sent and he never received the notice to file or the Self Assessment returns.
His Self Assessment returns were not submitted. This led to:
- HMRC issuing determinations for three of the four years.
- Late penalty surcharges were issued.
- The failure to submit a 2011-2012 return resulted in six-month, daily and twelve-month Penalty charges.
Both Mr Needham and his accountant tried to engage with HMRC but HMRC failed to explain why the Self Assessment returns had been issued.
In August 2023, he Appeal against the surcharges, Late filing penalties, determinations and interest, which totalled £11,745.08.
S.31A Tax Management Act allows for a written appeal to be made to HMRC within 30 days of the date the penalties are issued. S.49 allows an appeal after this date if the tribunal permits it.
The FTT considered three points which were established in William Martland v HMRC [2018] UKT178:
- The length of the delay in making the appeal.
- The reason why the default occurred.
- Evaluation of the circumstances by way of a balancing decision.
The FTT found:
- The appeal was submitted 10 years after the penalties were issued.
- HMRC failed to provide the assistance Mr Needham required, but this was not a valid reason for submitting the appeal ten years later.
- Despite HMRC’s lack of assistance, it was likely that Mr Needham was aware of his right to appeal for some time before his actual appeal submission.
The FTT also stated that there is no right of appeal or other statutory provision against interest and determinations and it had no jurisdiction to hear and determine such an appeal. This part of the appeal was struck out.
The appeal against surcharges and late penalties was dismissed.
Useful guides on this topic
Appeals
How to appeal a penalty for late filing of a tax return or late payment of tax. This section covers appeals in relation to tax returns and payments for income tax Self Assessment, Corporation Tax, PAYE, Non-residents CGT, VAT, ATED, SDLT and IHT.
Penalties
Tax penalties and appeals.
Late Appeals
When can you make a late tax appeal? What conditions must be met?
External link
Paul Needham vs HMRC [2024] TC09342
