Tribunal – Relying on a dilatory agent
In a recent case, a company claimed to have a reasonable excuse for failure to file annual employer’s returns. The Tribunal disagreed.
The company in question had failed to submit employer’s end of year returns for the financial years 2006/7, 2007/8 and 2008/9. The company director first heard of the matter when he received a penalty notice from HMRC in May 2009 in respect of the 2008/9 tax year. The director had relied upon his company secretary to file the returns, a task for which he had accepted responsibility when he had been appointed.
The company secretary had said that he had filed the returns, but was unable to produce any copies to that effect. The taxpayer company had been charged on an annual basis for the services of a full company secretarial service – which the Company Secretary had sub-contracted to a firm of accountants.
On hearing that the returns had not been submitted, the company director immediately changed his accountants. The new accountants filed the employer’s end of year returns and these had been accepted by the HMRC.
There was no proof whatsoever that the company secretary had filed the employer’s end of year returns, a fact which the tribunal appeared to accept. However the tribunal did not accept that reliance on a dilatory agent constituted a ‘reasonable excuse’. The tribunal said that the ultimate responsibility for filing the return falls ‘on the shoulders of the employer and that responsibility cannot be transferred to an agent acting on the employer’s behalf’.
The tribunal therefore found that the taxpayer company had no reasonable excuse and the penalties levied by HMRC were upheld. The taxpayer’s appeal was dismissed.