Paul Baxendale-Walker v The Commissioners for HMRC

Paul Baxendale-Walker v The Commissioners for HMRC

HMRC's application for a paragraph 50 penalty must be struck out because one of the statutory requirements for such a penalty is not met: either the paragraph 39 penalty was not validly imposed before the paragraph 50 application (if HMRC could vary the compliance date, the penalty was assessed before liability arose), or the application was out of time (if HMRC could not vary the date, the 12-month period for applying had expired). In either scenario, the statutory gateway for a paragraph 50 penalty is not satisfied, so the application has no reasonable prospect of success.

Parties
Applicant in the Strike Out Application; Respondent in the Substantive Application: Paul Baxendale-Walker; Respondents in the Strike Out Application; Applicants in the Substantive Application: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
03 June 2024
Procedural Posture
Tax Penalty Application (upper Tribunal, Tax and Chancery Chamber) / Application to Strike Out Hmrc's Application for a Tax Related Penalty Under Paragraph 50, Schedule 36, Finance Act 2008
Outcome
Application to strike out HMRC's application for a tax-related penalty allowed; HMRC's application struck out.
Legal Topics
Tax Related Penalties, Information Notices, Statutory Interpretation, Tribunal Procedure, Human Rights (article 6 Echr)
Tax Law Administrative Law Tax Related Penalties Information Notices Statutory Interpretation Tribunal Procedure Human Rights (article 6 Echr)

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Parties

Paul Baxendale-Walker

Applicant in the Strike Out Application; Respondent in the Substantive Application

The Commissioners for His Majesty’s Revenue and Customs

Respondents in the Strike Out Application; Applicants in the Substantive Application

Procedural Posture

Tax Penalty Application (upper Tribunal, Tax and Chancery Chamber) / Application to Strike Out Hmrc's Application for a Tax Related Penalty Under Paragraph 50, Schedule 36, Finance Act 2008

Legal Issues

  1. 1 Whether the statutory conditions in paragraph 50, Schedule 36, Finance Act 2008, for imposing a tax-related penalty are met
  2. 2 Whether HMRC's application for a tax-related penalty has any reasonable prospect of success
  3. 3 Whether HMRC can vary the compliance date in a tribunal-approved information notice

Ratio Decidendi

HMRC's application for a paragraph 50 penalty must be struck out because one of the statutory requirements for such a penalty is not met: either the paragraph 39 penalty was not validly imposed before the paragraph 50 application (if HMRC could vary the compliance date, the penalty was assessed before liability arose), or the application was out of time (if HMRC could not vary the date, the 12-month period for applying had expired). In either scenario, the statutory gateway for a paragraph 50 penalty is not satisfied, so the application has no reasonable prospect of success.

Court Disposition

Application to strike out HMRC's application for a tax-related penalty allowed; HMRC's application struck out.

Orders

  • HMRC's application for a tax-related penalty under paragraph 50, Schedule 36, Finance Act 2008 is struck out.