Richard Monks v The Commissioners for HMRC
[2023] UKFTT 853 (TC)
Contractors Support Limited v The Commissioners for HMRC
31 August 2023
[2023] UKFTT 744 (TC)
First-tier Tribunal
A company was asked for tax records and got fined for not giving them quickly enough. The court said the company should have given the records but it was okay that they were late asking about the fine. The request for records was fine, but being late in complaining about the fine was not.
Key Facts
- •Contractors Support Limited (appellant) received an information notice from HMRC on 12 May 2022 requesting information for accounting periods 2017-2020.
- •A penalty notice of £300 was issued for non-compliance.
- •The appellant's director, Mr. Johnston, acquired the company in April 2021 and claimed lack of access to records prior to that date.
- •The appellant's appeals were outside the 30-day statutory time limit.
- •The information notice requested bank statements and details of all clients, including those for whom no payment was received.
Legal Principles
HMRC can issue information notices under Schedule 36, Finance Act 2008, to obtain information reasonably required for checking a taxpayer's position.
Schedule 36, Finance Act 2008, paragraph 1
Taxpayers can appeal information notices unless the requirement is for statutory records (information required to be kept under tax law).
Schedule 36, Finance Act 2008, paragraph 29
Statutory records include information required to be kept and preserved under tax legislation. Interpretation informed by Couldwell Concrete Flooring Ltd v HMRC [2015] UKFTT 0136.
Schedule 36, Finance Act 2008, paragraph 62; Couldwell Concrete Flooring Ltd v HMRC [2015] UKFTT 0136
Late appeals may be allowed under section 49, Taxes Management Act 1970, at the Tribunal's discretion, considering factors such as delay length, reason for delay, and prejudice to both parties (Martland v HMRC [2018] UKUT 178 (TCC)).
Section 49, Taxes Management Act 1970; Martland v HMRC [2018] UKUT 178 (TCC); HMRC v BMW Shipping Agents [2021] UKUT 0091
Outcomes
Appeal against information notice allowed (in time).
The Tribunal found the appellant's June 10th email, within the context of prior communication, constituted a valid, albeit informally worded, appeal.
Information notice appeal struck out for lack of jurisdiction.
The Tribunal found that the information requested constituted statutory records; therefore, there was no right of appeal regarding the information itself.
Appeal against penalty notice rejected (out of time).
The Tribunal considered the delay (39 days) significant and found the reasons provided by the appellant unmeritorious; the appellant's claimed lack of expertise was unconvincing, given their professional services. The need for efficient litigation and respect for statutory time limits outweighed the prejudice to the appellant.