In Bradshaw v HMRC [2018] UKFTT 0368 (TC), the First-tier Tribunal (FTT) has held that a taxpayer's ignorance of the law is a reasonable excuse in relation to the late filing of a non-resident CGT return (NRCGT return).
As per RPC Mr Richard Bradshaw and his wife (the taxpayers), emigrated to Canada in 2004. The taxpayers were resident in Canada at the time they disposed of a UK property on 29 June 2015.
On 20 October 2016, the taxpayers
each delivered an NRCGT return to HMRC in electronic form. The NRCGT
returns claimed private residence relief until 20 July 2004 and showed
no gain or loss. As such, they declared no CGT liability.
On 2 and 5 December 2016, HMRC
wrote to the taxpayers issuing each with a notice of assessment for a
late filing penalty. The penalties were issued by HMRC on the basis
that the NRCGT returns were not filed within 30 days of the disposal of
the UK property, as required by section 12ZB, Taxes Management Act 1970.
The 30 day time limit was introduced by paragraph 43, Schedule 7,
Finance Act 2015, in relation to disposals made on or after 6 April 2015
(the New Law).
The taxpayers appealed the late
filing penalty assessments on 15 December 2016 and requested an internal
review by HMRC. The decision to issue the penalty assessments was
upheld on review.
The taxpayers contended that their ignorance of the law was a
reasonable excuse as HMRC had failed to publicise the introduction of
the New Law and as soon as they became aware of the New Law they
submitted NRCGT returns.
The FTT held that ignorance of the law can be a reasonable excuse for the late filing of a NRCGT return.
This ruling means that the concept of "reasonable excuse" is wider than HMRC's suggestion of an "unforeseeable or inescapable" event.
Another key point from the ruling is that taxpayers can rely on the advice of a third party, which has implications for those stuck in the IR35 and loan charge debacle.
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.
Ken Frost has negotiated a 10% discount on any polices that may suit your needs.
However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.
What is Solar Tax Investigation Insurance?
Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.
To find out more, please use this link Solar Tax Investigation Insurance
HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"
CGT was, and is, a minefield. As a Higher Grade Tax Officer I dealt with CGT on a regular basis and, even with good training over a number of years, I didn't always get it right!
ReplyDeleteI can empathise with this couple. It's so bleedin' obvious they weren't trying to defraud and, once they realised what they needed to do, they submitted the returns.
Anyone in HMRC with any common sense would have overturned the penalty on review.
But now I'm wondering if there's anyone left in HMRC with any? It makes me so sad to see the decline of HMRC in this way. Everything since the merger with C&E has been rushing downhill steadily and is clearly getting worse.
And whatever happened to tax simplification? A classic case here of it being needed - and quick!
Tax simplification will never happen. There are too many large accounting firms with their snouts in the trough 'advising' on policy.
DeleteIn so many cases CGT is beyond the capabilities of individuals let alone bookkeepers and accountants when shares in companies were purchased using brokers who no longer exist before CGT was even introduced and where records may well not exist.
DeleteThey don't have a competency for Common Sense. Doesn't look like they look for evidence of common sense from spotty fast trackers either.
ReplyDeleteWell said. 'Customers' should never underestimate the problems the fast trackers have caused Hmrc. Most of them end up in positions far too senior for their limited experience of real life, and the knock-on effect is the organisational chaos and governance issues we see day-to-day; everything from the violent bullying culture through to the inability of Hmrc to effectively tackle large scale evasion and organised fiscal crime.
DeleteSuch is the low skill set in the 'modern' Hmrc, I would bet at least 90% of staff have little to no knowledge of CGT themselves.
As the OP poster I can comment with some authority that your estimate may be a little low.
DeleteAs for "Fast Trackers", such people were the bane of our lives. They didn't have a clue and relied on us experienced staff to bale them out. In fact I was reprimanded for not helping a much higher grade "fast tracker£out of the deep hole he'd dug himself. He left after his 2 years were up and joined another Dept. He just couldn't get his head around tax!
Fast Trackers are nothing more than overpaid burger flippers. All they have is some Mickey Mouse Degree with no experience at all except getting blotto at the Uni Bar. That obviously makes them qualified. As a Result, they are like an Anti King Midas. Instead of gold, everything they touch turns to shit. Not to be trusted with an Ice Cream Van.
ReplyDeleteIf they insist of dragging people off the street, they should at least have some technical qualification in Accountancy or Tax. They might not be people managers but there is a reasonable assumption that they know what a set of accounts and a return looks like. Let's face it, that won't happen. As they could do a lot better than the madhouse and wouldn't touch it with a shitty stick.
Alas, what's left? Pimple squeezing duffers.
Agreed 100%......HMRC is a total charade....get the brown tongues in that talk the talk....but know FUCK ALL about how the tax system really works.....and what do we get??
ReplyDeleteA complete shambles.....mosey on over to Jon Thompson HMRC twitter account....this man who is supposedly leading us is a complete imbecile like the previous clowns before him.....the ODP Champion,Ambassador whatever title is flavour of the day (what the fuck is this shite he is peddling ?) is a utter crock of inane drivel....and he has his acolytes falling at his feet...pathetic bastards....remember taxpayers,sorry customers...you are paying for this....and then we his downtrodden A grade staff are forced to adhere to this nonsense or else we get a "must improve" and no pay rise.
Band O managers are spineless and try to bully the A grades into submission...it is a truly horrific place to work.
Time for the A grades to down tools and tell these bastards to fuck off.....when the stats start to go really tits up,this is when we the A grades can finally redress the balance.
Time to put the "real stats" in and not mask what they want us to put in.
NO MORE TIMING OUT....PUT IN YOUR REAL LOSSES....AND USE YOUR UNION !!!!
Well I was a Band O manager for a while and I can assure you that neither my colleagues nor I EVER bullied anyone. It's unfair to tar us with the same brush. In my office we all started as "A" grades and can remember what it was like to be trodden on, hence we treated those whom we managed with respect, courtesy and kindness.
DeleteI did hear some horrendous stories of bullying etc in the Contact Centres but, as I said, it's unfair and deeply hurtful to think of ALL Bands O as bullies.
Well you must not work in OUR office....i have worked in the IR,then HMRC for nearly 30 years and have had some truly fantastic managers....our current Band Os are a disgrace....they haven't one ounce of backbone between then...are bullied by the HO who in turn is bullied by the grade above him....but I would hate to think if i was a manager i would bully my staff...i couldn't live with myself.
DeleteOr is it the case that our Band Os don't want any hassle so take the easy option by passing on the grief to their own staff.....that is not proper management !!
I,in no way, am tarring all Band Os with the same brush and apologise if it came across as that.
When you have an office that has staff crying in the toilets,others walking out and the easy targets being made to resign then there must be a problem.....i have never known morale so low and let's not beat around the bush it's more that low morale....it's fear !!
What a wonderful brilliant caring employer we have....an absolute disgrace...shame on them !!!
I was left suicidal & broken as a result of HMRC bullying.
DeleteIs it the case that HMRC's nasty & outright violent internal culture is supported from the top?
Well, Jon Thompson lied to my local MP in regard to HMRC's misconduct and law-breaking. Not the behaviour we would expect from someone purporting to be a Christian. Draw your own conclusions.
A significant minority of HMRC management, from top to bottom, along with the wasters in HR, are deeply unpleasant, law-breaking, sinful, cowardly individuals who should be investigated and dealt with appropriately. Liars & bullies should never prosper but in HMRC they are allowed to run riot!!!
I think Thompson is asking Father Christmas for a Knighthood. Posting utter horseshit and buzzwords on social media so the Sir Humphries can rubber stamp it, before it all goes tits up next spring.
ReplyDeleteLook up @kitterati on Twitter....Mr Thompson's new darling....this is the sort of shite that we have shovelled down our throats daily !!!
DeleteYou couldn't make this shite up.
ReplyDeletewww.pcs.org.uk/pcs-in-hm-revenue-and-customs-group/latest-news/building-our-future-even-further-changes-made-to-the
Hmrc management treat staff like filth. the result is the poor service taxpayers receive.
DeleteThis is what happens when you have the imbeciles of EXCOM in charge...useless bastards who daily treat their staff with contempt.....utter scum.
ReplyDeleteWhy don't hmrc staff report the allegations to m.p s and the the authorities.
ReplyDeleteI sympathise with all the victims of bullying. Surely this needs to be stamped out. Report it.
Get all the law breakers out of hmrc and we would see a much improved tax system. Blow the whistle on the thuggish scum
ReplyDelete