Unfair and unconscionable

The taxpayer business received a £400 late-filing penalty notice for failing to submit its employer’s end-of-year return for 2009/10.

The taxpayer said it believed it was not necessary to submit a return because its only employee had ceased employment part-way through the year.

The business subsequently acknowledged this was a mistake and that HMRC were entitled to charge a penalty.

However the taxpayer complained that had the Revenue sent an earlier notification of late filing rather than waiting until the end of September the situation could have been rectified to avoid such a large penalty.

HMRC argued that the penalty was correct under TMA 1970 s 98A(2)(a).

The First-tier Tribunal judge Geraint Jones QC noted that HMRC deliberately waited until four months had passed before issuing...