In Neil Garrod v HMRC (2015) TC04237, the first tier tribunal (FTT) cancelled a penalty imposed for failing to submit a VAT return electronically, deeming that the circumstances in which the penalty was raised meant it was done unlawfully.


  • Mr Garrod was a VAT registered barrister. He refused to sign up for the Government Gateway, because he disagreed with the principle of ticking the box declaring that he had read the terms and conditions (T & Cs) (which he had not done).
  • Without ticking this box, a return could not be completed or filed via the HMRC website, and so he filed a paper return. A penalty was subsequently issued and he appealed to the FTT.
  • HMRC contended that it was allowed to impose the condition by virtue of SI 1995/2518, reg. 25A(8).

Findings and decision

The FTT dismissed HMRC’s contention regarding SI 1995/2518, because the tick box was not part of the online form itself, rather it was a pre-condition which then allowed the taxpayer to progress to the form.

The penalty was held to be unlawfully imposed. The requirement of the pre-condition being satisfied was tantamount to duress, and so unlawful. Citing Wandsworth London Borough Council v Winder [1985] AC 461 and Boddington v British Transport Police [1999] 2 AC 143, the principle that a member of the public has no liability where liability depends on the prior unlawful act of a public authority was followed, and the appeal was allowed.


N Garrod v HMRC