Reasonable excuse

Penalties for late self-assessment returns

The taxpayer appealed against penalties for the late filing of his tax returns for 2011-12 and 2012-13. He claimed reasonable excuse because he believed his accountants had submitted the forms. Further in August 2013 he had told HMRC that he had ceased self-employment and had received no indication that any returns were outstanding. He did not realise there was a problem until 2017 when he contacted HMRC to notify his new address. He then contacted the accountants who said their computers had been hacked so they had lost all their records. The taxpayer sent them the data and the returns were filed.

The First-tier Tribunal decided the taxpayer had reasonable excuse. He had received an acknowledgement from HMRC when he told them he was no longer self-employed. But the Revenue had not mentioned the outstanding return for 2011-12 nor the penalties. As soon...