Les Howard explains the vagaries and subtleties of the \u2018reasonable excuse\u2019 argument.<\/p>\n\n\n\n
The single Tax Tribunal regime means that \u2018reasonable excuse\u2019 arguments can be inter-changeable between different taxes. This is very helpful for advisers helping their clients decide whether to pursue an appeal on this issue.<\/p>\n\n\n\n
The Upper Tier decision in Christine Perrin provides a useful update of the position and seeks to provide a framework for future FTT and Upper Tier decisions. Its methodical approach means it has become a key decision for the Tribunal. The First Tier decision is at [2014] UKFTT 488; the Upper Tier is at [2018] UKUT 0156. Unless otherwise referenced, paragraph references are to the Upper Tier decision.<\/p>\n\n\n\n
The Perrin saga began on 2 January 2011 when Mrs Perrin tried to submit her Tax Return for 2009\/10 online. She received a submission receipt but not a confirmatory email. After correspondence, HMRC withdrew the penalty for \u00a32 in relation to the 2009\/10 Tax Return.
Mrs Perrin\u2019s 2010\/11 Tax Return was also late, and her 2011\/12 Tax Return was paid late.<\/p>\n\n\n\n
Penalties included fixed and daily penalties, summarised in the FTT decision, paras 1-8. The appeal against daily penalties was delayed pending the Donaldson Court of Appeal decision ([2016] EWCA, Civ, 761).<\/p>\n\n\n\n
The FTT decision is itself pretty detailed, being one of the very first appeals in relation to the then new late filing and late payment penalty regime.<\/p>\n\n\n\n
As an aside, the FTT criticised HMRC that their bundle was deficient. It used Mrs Perrin\u2019s own file of correspondence to supplement HMRC\u2019s deficient paperwork!<\/p>\n\n\n\n
Mrs Perrin argued that, since she had an honestly held belief that the tax returns had been submitted, a reasonable excuse was established. This issue was addressed by the FTT and I will return to it.<\/p>\n\n\n\n
HMRC included in their submission that a reasonable excuse is \u2018an unexpected or unusual event that is either unforeseeable or beyond a person\u2019s control.\u2019 This phrase is rarely seen now. It is wording found in the dissenting judgment in the Steptoe case, an early reasonable excuse decision ([1992] STC 757). It was disingenuous of HMRC to use that quote. (See paras 101-110 of the FTT decision, and para 83 of the Upper Tier decision.)<\/p>\n\n\n\n
Read the full article below:<\/p>\n\n\n\n
Les Howard explains the vagaries and subtleties of the \u2018reasonable excuse\u2019 argument. The single Tax Tribunal regime means that \u2018reasonable excuse\u2019 arguments can be inter-changeable between different taxes. This is very helpful for advisers helping their clients decide whether to pursue an appeal on this issue. The Upper Tier decision in Christine Perrin provides a […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[],"class_list":{"0":"post-1249","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-october-november-2021"},"_links":{"self":[{"href":"https:\/\/taxinvestigation.co\/new\/wp-json\/wp\/v2\/posts\/1249","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/taxinvestigation.co\/new\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/taxinvestigation.co\/new\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/taxinvestigation.co\/new\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/taxinvestigation.co\/new\/wp-json\/wp\/v2\/comments?post=1249"}],"version-history":[{"count":1,"href":"https:\/\/taxinvestigation.co\/new\/wp-json\/wp\/v2\/posts\/1249\/revisions"}],"predecessor-version":[{"id":1251,"href":"https:\/\/taxinvestigation.co\/new\/wp-json\/wp\/v2\/posts\/1249\/revisions\/1251"}],"wp:attachment":[{"href":"https:\/\/taxinvestigation.co\/new\/wp-json\/wp\/v2\/media?parent=1249"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/taxinvestigation.co\/new\/wp-json\/wp\/v2\/categories?post=1249"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/taxinvestigation.co\/new\/wp-json\/wp\/v2\/tags?post=1249"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}