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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