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You are here: BAILII >> Databases >> First-tier Tribunal (Tax) >> Croft House Associates Ltd v Revenue & Customs [2013] UKFTT 546 (TC) (2 October 2013) URL: http://www.bailii.org/uk/cases/UKFTT/TC/2013/TC02935.html Cite as: [2013] UKFTT 546 (TC) |
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[2013] UKFTT 546 (TC)
TC02935
Appeal number: TC/2012/05017
TYPE OF TAX – PAYE – late submission of Employer’s Annual Return – whether scale of penalty is reasonable , and whether penalty is unfair and should be reduced - Decision of Upper Tribunal in Hok Ltd applies. Whether reasonable excuse for late submission of return - No.
FIRST-TIER TRIBUNAL
TAX CHAMBER
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CROFT HOUSE ASSOCIATES LIMITED |
Appellant |
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- and - |
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THE COMMISSIONERS FOR HER MAJESTY’S |
Respondents |
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REVENUE & CUSTOMS |
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TRIBUNAL: |
PRESIDING MEMBER PETER R. SHEPPARD FCIS FCIB CTA AIIT |
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The Tribunal determined the appeal on 22 August 2013 without a hearing under the provisions of Rule 26 of the Tribunal Procedure (First-tier Tribunal)(Tax Chamber) Rules 2009 (default paper cases) having first read the Notice of Appeal dated 19 April 2012 with enclosures, and HMRC’s Statement of Case submitted on 20 June 2013 with enclosures. The Tribunal wrote to the Appellant on 1 July 2013 indicating that if they wished to reply to HMRC’s Statement of Case they should do so within 30 days. No reply was received.
© CROWN COPYRIGHT 2013
DECISION
This considers an appeal against a penalty of £500 levied by the respondents for the late filing by the appellant of its Employer Annual Returns (forms P35 and P14) for the year 2010 – 2011. By a direction of the Tribunal dated 2 May 2012 the appeal was stood over until 60 days after the issue of its decision by the Upper Tribunal (Tax & Chancery Chamber) in the matter of Hok Ltd. That decision was released on 23 October 2012.
Income Tax (PAYE) Regulations 2003, in particular Regulations 73 and 205.
Social Security (Contributions) Regulations 2001 in particular Schedule 4 Paragraph 22.
Taxes Management Act 1970, in particular Section 98A(2) and (3); Section 100; Section 100B; and Section 118 (2).
HMRC v Hok Ltd. [2012] UKUT 363 (TCC)
Regulation 73(1) of Income Tax (PAYE) Regulations 2003 and Paragraph 22 of Schedule 4 of Social Security (Contributions) Regulations 2001 require an employer to deliver to the respondents a complete Employer Annual Return (Forms P35 and P14) before 20 May following the end of the tax year. In respect of the year 2010-2011. The appellant failed to submit Forms P35 and P14 until 2 October 2011. On 26 September 2011 the respondents sent the appellant a late filing penalty notice for £400 for the 4 month period 20 May 2011 to 19 September 2011. On 5 October 2011 the respondents sent the appellant a final late filing penalty notice for £100 for the period 20 September 2011 to 2 October 2011.
6. The appellant considers a penalty of £100 is appropriate but argues that because HMRC did not advise the oversight for 4 months it is faced with a penalty of £400 more than it would have been if HMRC had levied the initial £100 penalty promptly. The appellant considers the penalty is disproportionate and asks the Tribunal to reduce the level of it to £100. In the Notice of Appeal the appellant considers his arguments are supported by the reasoning of the First-tier tribunal in its decision in the case of HOK Ltd. However that decision was later overturned on appeal.
8. The appellant offers no excuse for the late return other than it being an oversight.
9. The level of the penalty; whether the respondent’s failure to send a prompt reminder was unfair; and the respondent’s updated procedures are all covered in the decision of the Upper Tribunal in the case of Hok Ltd. That decision also considers whether the jurisdiction of the First-tier Tribunal includes the ability to discharge a penalty on the grounds of unfairness. At Paragraph 36 of that decision it states “…the statutory provision relevant here, namely TMA s 100b, permits the tribunal to set aside a penalty which has not in fact been incurred, or to correct a penalty which has been incurred but has been imposed in an incorrect amount, but it goes no further. …it is plain that the First-tier Tribunal has no statutory power to discharge, or adjust a penalty because of a perception that it is unfair.”