William Archer v The Commissioners For His Majesty’s Revenue And Customs
[2023] EWCA Civ 626
Exclusive Promotions Limited v The Commissioner for HMRC
9 November 2023
[2023] UKUT 269 (TCC)
Upper Tribunal
A company didn't pay taxes on time and tried to argue they had a good reason. The court said they didn't, because their reasons weren't good enough, and they had to pay the penalties.
Key Facts
- •Exclusive Promotions Limited (EPL) received two Accelerated Payment Notices (APNs) from HMRC in 2016 for a tax avoidance scheme.
- •EPL did not pay the APNs by the due date and incurred penalties.
- •EPL challenged the penalties, arguing that HMRC did not make a determination as required by s. 222 FA 2014, that a genuine belief in the success of a judicial review was a reasonable excuse for late payment, and that an interim relief agreement provided a reasonable excuse.
- •The First-tier Tribunal (FTT) dismissed EPL's appeal.
- •EPL appealed to the Upper Tribunal (UT).
Legal Principles
HMRC must consider representations made under s. 222 FA 2014.
Finance Act 2014, s. 222
A genuine belief that a judicial review will succeed cannot form an objectively reasonable excuse for late payment of APNs.
Beadle v HMRC [2020] EWCA Civ 562
The FTT lacks jurisdiction in an APN penalty appeal to consider public law challenges to the validity of the APNs.
Beadle v HMRC [2020] EWCA Civ 562
Reasonableness is determined by the specific facts of each case, taking into account the taxpayer's experience and attributes.
Perrin v HMRC [2018] STC 1302 and William Archer v HMRC [2023] EWCA Civ 626
An interim relief agreement that only stays enforcement does not provide a reasonable excuse for non-payment of APNs.
This case
Outcomes
EPL's appeal was dismissed.
HMRC's letter of 22 February 2017 was deemed a determination under s. 222(4), even though it didn't address all of EPL's points. The UT held the FTT lacked jurisdiction to review the determination's validity. Further, the UT found EPL did not have a reasonable excuse for late payment because the director's belief in the success of the judicial review was not objectively reasonable given his lack of understanding of the case and the subsequent failure of the judicial review. The interim relief agreement did not change the payment deadlines or prevent penalties.