Tribunal: Daily penalties for late income tax return
The first tier tribunal recently considered an appeal by a self-assessment taxpayer against daily penalties charged for apparent non submission of income tax returns for the tax years ended 5 April 2005 and 2006. The taxpayer appealed the daily penalties which amounted to £280 per return e.g. £20 per day for each late return for a fixed period of 14 days.
The taxpayer’s defence centred on two main facts, the first was that he did not owe HMRC any tax for the years in question and the second that in the period between 2004 and 2009 he had submitted nine separate income tax returns to three separate HMRC offices. The taxpayer finally submitted complete and acceptable tax returns online on 12 and 16 January 2009 respectively.
HMRC did not address the issue as to whether the taxpayer owed any tax or was entitled to a refund. HMRC were also unable to confirm whether they had checked whether the tax returns had been sent to three separate HMRC offices as the taxpayer contended.
The tribunal found that the taxpayer, who did not give oral evidence, had submitted written evidence which‘had a ring of truth about it’. The tribunal gave the taxpayer the benefit of the doubt and concluded that the taxpayer had a reasonable excuse for HMRC’s non receipt of the returns.
The tribunal decided that the penalties imposed should be reduced to nil.