Tribunal: Reasonable excuse for late payment

The Tribunal has found in favour of a taxpayer who appealed against a late payment surcharge.

The taxpayer was an employee subject to the PAYE system. He had received and had completed self assessment tax returns during the 1990s because he had investment income to declare and expenses to claim. The issue of these forms had then ceased, and forms P810 were issued and completed instead.

In April 2008, the taxpayer received a tax review form P810 for 2007/08, which he completed and returned to HMRC on 25 September 2008. On 13 January 2009, HMRC wrote to the taxpayer stating that, although he had completed a form P810, he had to complete a self assessment tax return, and this was subsequently issued to him about two weeks later. It included the standard statement that the deadline for submission of the return was three months later (effectively 29 April 2009).
The page SA102 was missing. After the taxpayer obtained the missing page, he submitted the form on 13 April 2009 with a covering letter.

On 19 June, HMRC issued a calculation showing a tax liability of £4,390. The taxpayer had not previously received a bill of such an amount and was confused as to how this had arisen. The Revenue’s helpline was unable to assist, and when the taxpayers visited the department’s Hull office on 15 June he was told the computer ‘was down’.

Consequently, the taxpayer had to obtain advice from an accountant, having done so he paid the tax on 20 June 2009.

The taxpayer appealed against HMRC’s issue of a surcharge of £219.52, claiming he had a reasonable excuse for late payment. The Revenue’s review upheld the charge and the case went to the Tribunal.

The judge held that the taxpayer had genuinely attempted to sort out his tax affairs, to return documents promptly, and to pay the tax properly due from him. He had been misled by the lack of clarity and ambiguity in the documents he received from HMRC. Accordingly the taxpayer had a reasonable excuse throughout the period. The surcharge was consequently discharged and ordered to be repaid to the taxpayer.

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