Unfair treatment

The taxpayer retired in September 2010. He was required by HMRC to complete a 2010/11 self assessment return. He submitted it online within the stated deadline in the belief the tax due from his former employment was in order.

Further tax had arisen on severance payments made to the taxpayer. The employer had deducted basic rate tax but should paid the 40% rate. The Revenue issued demands for the outstanding money. Taxpayer had no idea what the amounts were for. After receiving a written explanation he paid the tax.

The taxman subsequently issued a late-payment penalty against which the taxpayer appealed.

The First-tier Tribunal noted the taxpayer’s “genuine and honest belief that he had paid all his taxes”. No one had warned him there might be further amount to pay on his severance pay but he settled the debt without delay after taking the the initiative to find...