Chartridge Development Ltd v Revenue & Customs (ANNUAL TAX ON ENVELOPED DWELLINGS – tax returns) [2016] UKFTT 766 (TC) (16 November 2016)

Chartridge Development Ltd v Revenue & Customs (ANNUAL TAX ON ENVELOPED DWELLINGS – tax returns) [2016] UKFTT 766 (TC) (16 November 2016)

Penalty notices for four of the five properties contained gross errors in the filing dates, which were likely to mislead and could not be cured by s 114(1) TMA 1970; thus, those penalties were invalid and cancelled. The penalty for 80 Fulmer Drive, where the notice was substantially correct, was upheld. Chartridge did not have a reasonable excuse for late filing, as mere delegation to an employee without further checks did not constitute reasonable care. HMRC's decision on special circumstances was not flawed, and no reduction was warranted.

Citation
[2016] UKFTT 766
Parties
Appellant: Chartridge Developments Limited; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
16 November 2016
Procedural Posture
Tax Penalty Appeal / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal allowed in part
Legal Topics
Annual Tax on Enveloped Dwellings (ated), Late Filing Penalties, Finance Act 2013, Finance Act 2009 Schedule 55, Reasonable Excuse, Special Circumstances, Defective Penalty Notices
Tax Law Annual Tax on Enveloped Dwellings (ated) Late Filing Penalties Finance Act 2013 Finance Act 2009 Schedule 55 Reasonable Excuse Special Circumstances Defective Penalty Notices

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Parties

Chartridge Developments Limited

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Tax Penalty Appeal / First Tier Tribunal (tax Chamber) Decision

Legal Issues

  1. 1 Whether defects in penalty notices invalidate ATED late filing penalties
  2. 2 Whether the taxpayer had a reasonable excuse for late filing
  3. 3 Whether HMRC's decision on special circumstances could be revisited

Ratio Decidendi

Penalty notices for four of the five properties contained gross errors in the filing dates, which were likely to mislead and could not be cured by s 114(1) TMA 1970; thus, those penalties were invalid and cancelled. The penalty for 80 Fulmer Drive, where the notice was substantially correct, was upheld. Chartridge did not have a reasonable excuse for late filing, as mere delegation to an employee without further checks did not constitute reasonable care. HMRC's decision on special circumstances was not flawed, and no reduction was warranted.

Court Disposition

Appeal allowed in part

Orders

  • Penalties relating to Tilehurst, Chancing Rye, Amberley, and 71 Fulmer Drive are cancelled.
  • Penalties relating to 80 Fulmer Drive are upheld.