Onuchika Eleonu v The Commissioners for HMRC
[2023] UKFTT 109 (TC)
Sarah Godliman v The Commissioners for HMRC
16 January 2024
[2024] UKFTT 81 (TC)
First-tier Tribunal
Someone got hit with late tax return penalties. They said they shouldn't have had to file and made mistakes on their returns. The judge disagreed; they had no good reason for being late, and the penalties were upheld.
Key Facts
- •Ms Godliman appealed against £1400 in penalties for late filing of self-assessment tax returns for 2017-18 and 2018-19.
- •Returns were filed 559 and 553 days late respectively.
- •Penalties included a £100 late filing penalty, a £300 6-month penalty, and a £300 12-month penalty for each year.
- •Appellant claimed she was incorrectly placed in the self-assessment regime and that the returns contained errors.
- •Appellant did not attend the hearing and did not provide a witness statement.
- •Appellant accessed HMRC systems to register for self-assessment as a business (sole trader) in April and November 2019.
- •Tax returns showed income from employment and profit from self-employment.
Legal Principles
Late filing penalties for self-assessment tax returns are governed by Schedule 55 of the Finance Act 2009 and section 8 of the Taxes Management Act 1970.
Finance Act 2009, Schedule 55; Taxes Management Act 1970, section 8
A 'reasonable excuse' for late filing may negate penalty liability (Schedule 55, paragraph 23). Insufficiency of funds is not a reasonable excuse unless due to events outside the taxpayer's control.
Schedule 55, paragraph 23
HMRC may reduce penalties in special circumstances (Schedule 55, paragraph 16), excluding ability to pay.
Schedule 55, paragraph 16
Outcomes
Appeal dismissed.
The Appellant failed to demonstrate a reasonable excuse for the late filing. The Tribunal found that the tax returns, showing income from both employment and self-employment, were submitted by the appellant, and that no steps were taken to correct the information or challenge the need for the returns after receiving notification. No special circumstances were identified to justify a penalty reduction.