Richard Monks v The Commissioners for HMRC
[2023] UKFTT 853 (TC)
Josephine Mary Hayes v The Commissioners for HMRC
27 September 2024
[2024] UKFTT 118 (TC)
First-tier Tribunal
HMRC investigated Ms. Hayes' late tax return. Even though HMRC temporarily waived penalties for late filing, the court ruled the investigation was legitimate because the late filing deadline wasn't officially extended. The investigation continues because Ms. Hayes hasn't provided all the requested information. The court also refused to reveal if someone else reported Ms. Hayes to HMRC to protect confidentiality.
Key Facts
- •Ms. Hayes' 2019/20 tax return was filed late (February 28, 2021, after the January 31 deadline).
- •HMRC opened an enquiry on March 7, 2022.
- •Ms. Hayes argued the enquiry was invalid due to lateness and excessive information requests.
- •HMRC emails offered a late filing penalty waiver until February 28, 2021, but did not explicitly extend the filing deadline.
- •Ms. Hayes requested disclosure of any third-party communications that may have prompted the enquiry.
Legal Principles
Time limits for submitting tax returns are set out in Section 8 of the Taxes Management Act 1970 (TMA 1970).
TMA 1970, Section 8
Time limits for HMRC to open an enquiry are set out in Section 9A TMA 1970.
TMA 1970, Section 9A
Section 118(2) TMA 1970 deals with deemed compliance where further time is allowed or a reasonable excuse exists. The Court of Appeal in *Raftopoulou* [2018] EWCA Civ 818 clarified that this section does not grant a general power to extend time limits.
TMA 1970, Section 118(2); *Raftopoulou* [2018] EWCA Civ 818
HMRC has wide powers to open enquiries for any reason. The taxpayer can provide explanations during the enquiry process.
Case law and Tribunal interpretation
Outcomes
The enquiry was validly opened.
The HMRC emails did not extend the filing deadline; *Raftopoulou* establishes that Section 118(2) TMA 1970 does not provide a general power to extend time limits.
The application to close the enquiry was refused.
HMRC lacks the full facts needed for a reasonable assessment due to Ms. Hayes' non-compliance with information requests.
The application for disclosure of third-party communications was refused.
Such disclosure is not relevant to the application's outcome and would compromise HMRC's confidentiality.
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