Matthew Atkin v The Commissioners for HMRC
[2024] UKFTT 786 (TC)
Amber Awan v The Commissioners for HMRC
7 October 2024
[2024] UKFTT 891 (TC)
First-tier Tribunal
Mrs. Awan filed her taxes late. Even though she didn't owe any tax, she was fined. The court said she should have checked her online account regularly and contacted the tax office sooner; her reasons weren't good enough to avoid the fine.
Key Facts
- •Mrs. Awan received property income since 2015 and is registered for self-assessment.
- •She filed tax returns for several years, but not for 2021/22, which was filed 177 days late.
- •No tax was due for 2021/22, but late filing penalties of £980 were imposed (£100 initial + £880 daily penalties).
- •Mrs. Awan had previously contacted HMRC about filing requirements and on two occasions was told a return wasn't necessary.
- •HMRC issued electronic notices to file and penalty notices to her online personal tax account (PTA) and email.
- •Mrs. Awan claimed a 'reasonable excuse' due to being busy with a new job and family commitments, and lack of understanding about filing requirements.
- •HMRC argued that Mrs. Awan's responsibility to regularly check her PTA for notices was key, the penalty regime is proportionate even with no tax due and that there were no 'special circumstances' for a reduction.
Legal Principles
Late filing penalties are imposed under Schedule 55, Finance Act 2009 (FA 2009).
Finance Act 2009, Schedule 55
Section 8(1) Taxes Management Act 1970 (TMA 1970) requires taxpayers to file returns when required by HMRC.
Taxes Management Act 1970, Section 8(1)
A 'reasonable excuse' for late filing can prevent penalties. The Tribunal considers objective reasonableness, taking into account the taxpayer's circumstances.
Schedule 55, FA 2009, paragraph 23; Christine Perrin v HMRC [2018] UKUT 0156 (TCC)
HMRC may reduce penalties in 'special circumstances', but not due to ability to pay or revenue balancing.
Schedule 55, FA 2009, paragraph 16
The penalty regime under Schedule 55 FA 2009 is proportionate, even when no tax is due.
Barry Edwards v HMRC [2018] UKUT 131 (TCC)
Outcomes
Appeal dismissed.
The Tribunal found that Mrs. Awan's circumstances did not constitute a reasonable excuse for late filing. Her failure to check her online account and proactive contact with HMRC before the deadline was key. There were no special circumstances justifying penalty reduction.