Lalji Vekaria v The Commissioners for HMRC
[2023] UKFTT 288 (TC)
Vijayasarathi Baskararajulu v The Commissioners for HMRC
18 May 2023
[2023] UKFTT 430 (TC)
First-tier Tribunal
A man appealed late tax penalties due to family problems and an absent accountant. The judge felt sorry for him but said the delay was too long. However, the judge also said the man's initial contact with the tax office was enough to keep the appeal alive, even if it was late.
Key Facts
- •Mr. Baskararajulu appealed against £1300 in late filing penalties for the 2019-20 tax year.
- •HMRC applied to strike out parts of the appeal, arguing lack of jurisdiction because the appeal wasn't first made to HMRC as per section 49D of the Taxes Management Act 1970 (TMA 1970).
- •Mr. Baskararajulu's appeal included penalties of £100, £900, and £300.
- •Mr. Baskararajulu argued he had a reasonable excuse for late filing due to his brother's death, his wife's illness after childbirth, and his accountant's absence.
- •The appeal was filed late, three to four months after the deadline.
Legal Principles
Jurisdiction to hear tax appeals requires the appeal to be first notified to HMRC before going to the Tribunal (except in specific circumstances).
Taxes Management Act 1970 (TMA 1970), section 49D
A notice of appeal must be in writing, within 30 days of the assessment, and specify the grounds of appeal.
TMA 1970, section 31A
The Tribunal can consider late appeals if there's a reasonable excuse or special circumstances.
TMA 1970, section 49(2)(b)
A 'reasonable excuse' for late filing is determined objectively, considering the taxpayer's circumstances and attributes (as per Perrin v HMRC).
Finance Act 2009 (FA 2009), Schedule 55, paragraph 23; Perrin v HMRC [2018] UKUT 0156 (TCC)
Outcomes
HMRC's strike-out application was refused.
Mr. Baskararajulu's letter of 1 January 2022, though late, was deemed a valid notification of appeal to HMRC, meeting the requirements of TMA 1970, section 31A.
The appeal regarding the late filing penalties was dismissed.
While the Tribunal sympathised with Mr. Baskararajulu's circumstances, his reasons did not constitute a 'reasonable excuse' for the prolonged delay in filing his return, exceeding the time limit significantly.