Island knowledge, national expertise
If HMRC Don't Get it Right
You may be forgiven for thinking that the authorities always follow proper procedures, but that is not the case, and when they fail, their actions may not be legally valid.
In a recent case, a series of errors put a taxpayer and HM Revenue and Customs (HMRC) at loggerheads in the Tax Tribunal, with the result that HMRC's penalty assessments were partly cancelled.
In April 2016, the taxpayer had received a notice requiring her to file a tax return. She did so the following October, but it was inadvertently signed not by her but by her husband. HMRC rejected the return and advised her that they would not levy a penalty if it was refiled within 21 days…that was in December 2016. She eventually filed the return in March 2017.
The penalties levied for late filing of the return totalled £530 and the Tribunal agreed that there were no special circumstances that would justify cancelling them; nor was there any 'reasonable excuse' for the return being late. However, the penalties were (nearly) cancelled, because the notice she was sent requiring her to file the return could not be shown to have been issued 'by an officer of the board', as required by the legislation, but had been computer-generated. The original notice to file a return was therefore invalid.
However, the notice sent in December 2016 rejecting the incorrectly signed return had been signed by an HMRC employee and was therefore valid. A penalty for failing to comply with that notice, which was due because the return was more than three months late, was therefore correct and the revised penalty was accordingly fixed at £100.
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