Chalmers v Revenue & Customs (INCOME TAX/CORPORATION TAX : Penalty) [2018] UKFTT 555 (TC) (25 September 2018)

Chalmers v Revenue & Customs (INCOME TAX/CORPORATION TAX : Penalty) [2018] UKFTT 555 (TC) (25 September 2018)

Penalties for 2013-14 and 2014-15 are cancelled because notices to file were not validly served due to HMRC not holding a live address for the appellant. For 2015-16, the appellant had a reasonable excuse for late filing up to 2 November 2017 due to reliance on her accountant, but this excuse ceased thereafter; thus, only part of the penalties are discharged. Reliance on an agent for payment is not a reasonable excuse where the taxpayer failed to update HMRC with her address and did not take reasonable care to avoid the failure.

Citation
[2018] UKFTT 555
Parties
Appellant: Jade Chalmers; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
25 September 2018
Procedural Posture
Tax Penalty Appeal / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal allowed in part
Legal Topics
Income Tax, Corporation Tax, Penalties, Late Filing, Late Payment, Reasonable Excuse, Service of Notice, Agent Reliance
Tax Law Income Tax Corporation Tax Penalties Late Filing Late Payment Reasonable Excuse Service of Notice +1 more

Case Brief

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Parties

Jade Chalmers

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 penalty notices and notices to file were validly served on the appellant
  2. 2 Whether reliance on an accountant constitutes a reasonable excuse for late filing/payment
  3. 3 Whether the appellant took reasonable care to avoid the failures

Ratio Decidendi

Penalties for 2013-14 and 2014-15 are cancelled because notices to file were not validly served due to HMRC not holding a live address for the appellant. For 2015-16, the appellant had a reasonable excuse for late filing up to 2 November 2017 due to reliance on her accountant, but this excuse ceased thereafter; thus, only part of the penalties are discharged. Reliance on an agent for payment is not a reasonable excuse where the taxpayer failed to update HMRC with her address and did not take reasonable care to avoid the failure.

Court Disposition

Appeal allowed in part

Orders

  • Penalties for 2013-14 and 2014-15 under Schedule 55 cancelled
  • For 2015-16, £600 of daily penalties and £100 late filing penalty under Schedule 55 discharged; balance of £600 daily penalties and £300 6-month penalty confirmed