Tribunal – Not ‘reasonable’ to rely on accountants
In a recent case, the Tribunal examined whether a taxpayers reliance on his accountants was a reasonable excuse for failure to provide information and documentation to HMRC. The information related to HMRC’s enquiries into the taxpayer’s corporation tax returns.
The initial request for information was sent by HMRC to the taxpayers and copies were sent to the taxpayer’s accountant. The information request related to details of rentals, trade debtors, a previous claim for group relief and an explanation of some ‘other income’ sources.
The deadline for the requested information was extended a number of times for more than 3 months due to the accountant’s heavy workload. Subsequently HMRC issued penalty notices which were ultimately appealed by the taxpayer’s accountant.
The question in this case was whether reliance on a third party was a valid ‘reasonable excuse’. The Tribunal Judge distinguished this case from a previous decision of the Special Commissioner which allowed an appeal for reliance on a third party in a complex matter.
In this case the information and documentation requested by HMRC were straightforward and the taxpayer could have easily provided the documentation. The appeal was dismissed and the penalties were confirmed.