Misunderstanding of the regime

Penalties for late filed returns

The taxpayers appealed against late filing penalties imposed on partnership and individual self-assessment returns for 2010-11 and 2011-12. They said they were unaware of the new penalty regime in April 2010 nor did they realise there was a time limit for appealing against penalties and that they were no longer cancelled if no tax was payable. They had changed agent in 2012 who brought their affairs up to date and told them no tax was due.

The First-tier Tribunal noted that Mrs H had spoken to HMRC about the penalties. The judge accepted that she had misunderstood what the officer told her ‘possibly because the guidance given to her was not as clear as it should have been’. However after calling another time – having received a notification about daily penalties – she understood that there was no penalty cap when no tax...