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Background to the First-tier Tribunal decision in Fab Cleaning Management.
KEY POINTS
- Penalties imposed for incorrectly completed end-of-year returns.
- Tribunal said the forms reflected the tax paid.
- Read the legislation on penalties.
- HMRC’s systems should have discovered the incorrect PAYE deductions sooner.
In his editorial ‘Full of surprises’ Andrew Hubbard mentioned the Fab Cleaning Management case and the unexpected (to him) result of applying the correct penalty test.
As the adviser who represented the taxpayer it will be useful to provide further background to the case.
Reminder of the facts
The taxpayer company had used the wrong tax codes resulting in an underpayment of PAYE over three years. HMRC as well as determining the additional tax (which was agreed) levied penalties under FA 2007 Sch 24 para 1 for filing inaccurate P14 and P35 end-of-year returns.
The taxpayer’s appeal...
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