Many taxpayers are sick to death of being called "customers" by HMRC, given that taxpayers have no choice but to "use" HMRC's "services".
However, calling taxpayers "customers" has come back to bite HMRC on the arse.
Step forward Mr Marc Capuano who appealed against the penalties that HMRC imposed under Schedule 55 of the Finance Act 2009 (‘Schedule 5 5’) for a failure to submit the 2011 - 12 self - assessment return (‘SA return’) on time.
The penalties that were charged can be summarised as follows:
(1) a £100 late filing penalty under paragraph 3 of Schedule 55 imposed on 14 October 2014 . 10
(2) Daily penalties totalling £900 under paragraph 4 of Schedule 55 imposed on 14 April 2015 .
(3) a £300 six - month penalty under paragraph 5 of Schedule 55 imposed on 14 April 2015.
(4) a £300 twelve - month penalty under paragraph 5 of Schedule 55 15 imposed on 13 October 2015.
The appellant had three separate part - time employments in the year 2011 - 12, and under each employment, he received the full personal allowance against his earnings, which totalled £9,222.89.
As a result of the personal allowance having been allocated against his overall 20 taxable earnings more than once, there was a net shortfall in PAYE deducted of £349 in 2011 - 12 . The PAYE underpayment could have been collected by adjusting the coding notice for the following year, or settled as a one - off payment.
For whatever reasons which are not on file, HMRC’s review letter stated that the PAYE underpayment 25 could not be ‘coded out’. Consequently, the appellant was served a paper return to file for 2011 - 12 on 30 June 2014. As the return was issued outwith the normal self - assessment cycle, it was due for filing 3 months and a week after the date of issue, which was 7 October 2014 .
The return was eventually filed electronically with HMRC on 31 March 2016, 30 which was almost 18 months after the return filing date .
The Tribunal notes that the appellant was also late in filing his return for 2010 - 11, and had incurred the maximum penalties in relation thereto of £1,600. The penalties for 2010 - 11 have been cancelled by HMRC on review, and is not a matter before the Tribunal.
The Tribunal ruled in Mr Capuano's favour, on the grounds that he had a reasonable excuse.
The Tribunal went on to note that the appellant’s experience of frustrated attempts to contact HMRC would seem to fit into the period of ‘staggeringly bad ’ delivery of customer service between December 2012 to June 2015 .
Without the knowledge and former experience in filing an SA return, the appellant quite understandably turned to HMRC for help. The taxpayers are supposed to be ‘customers’ of HMRC receiving a service too, but the service that could be expected by the appellant from HMRC failed to deliver at the material time.
Viewed in this light, the appellant’s delay in filing the return was excusable.
"The appellant would seem to be one of the taxpayers who had been failed by HMRC in this respect."What goes around, comes around!
Tax does have to be taxing.
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