This week's opinion

Should individuals who have no tax liability face penalties for filing their tax return late? I ask the question – not for the first time – because this is an issue that arises in tribunal decisions time and again.

In Headen (TC6294) the taxpayer was charged penalties of £3 200 for two years of late filing. She was not resident in the UK and had no liability but had not notified HMRC of her departure. The details of this case are odd – it is not clear who eventually filed her return – but it is a stark reminder that significant penalties can arise in nil liability cases. Is this right? Clearly it is how the law works and neither HMRC nor the tribunals can be criticised for applying the law but the bigger issue is whether the system should work this way.

Some colleagues believe passionately that there should...