Tribunal – One wrong decision doesn’t justify another
The tribunal recently considered an appeal by a taxpayer in respect of whether or not there was a reasonable excuse for the late filing of a partnership return. The appeal was initially allocated to the default paper track and dismissed. The taxpayer however requested a decision with full reasons with a view to seeking leave to appeal to the upper tribunal.
The taxpayer in this case had failed to submit partnership returns electronically so submitted a paper return on 22 January 2009 which was long after the paper return deadline of 31 October 2008. The deadline for electronic filing was 31 January 2009. HMRC provides individual taxpayers the ability to file straightforward returns online using HMRC’s own software, however, it is clear that this software is not capable of handling partnership returns. The tribunal commented that the professional bookkeeper who prepared the returns ‘should have been aware that commercial software is required to file partnership returns electronically’. HMRC issued penalties and the taxpayer appealed on the grounds of having a reasonable excuse for the filing.
The taxpayer’s bookkeeper contended that she had a similar situation with another client where HMRC accepted that there was a reasonable excuse for the late filing of a partnership returns in identical circumstances and contended that HMRC should treat all taxpayers in an even handed manner.
The tribunal agreed that in principle this contention was correct, however, there was no evidence that the facts relating to the bookkeeper’s other client were identical. The tribunal went further and said that even‘if the two cases are on all fours, HMRC were wrong in allowing the other taxpayer to file a paper return after 31 October 2008 without incurring a surcharge’.
The tribunal could not allow a “wrong” to justify a further “wrong” in this – and possibly other – appeals.