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Flame Introductions Ltd (TC5478)
Penalties imposed for late filed corporation tax returns
The taxpayer was late submitting four corporation tax returns. HMRC imposed penalties for each one and the company appealed. It said it had a reasonable excuse because of errors made by HMRC when the company began to trade and pressure of work.
The First-tier Tribunal concluded there was no reasonable excuse. The judge confirmed the amount of the first two penalties as £100 each. However, HMRC had increased the penalties to £500 for each of the other late submissions. This was incorrect. The increased penalty was aimed at the serial defaulter and applied after three late filings. In this case, the taxpayer had filed three of the returns simultaneously, so the increased penalties should not apply. The £500 penalties were reduced to £100 each.
The taxpayer’s appeal was allowed in part.
