Late filed employment intermediary returns

The taxpayer recruited and placed supply teachers. It contracted with schools to provide teachers and invoiced the schools for the supply. It paid the teachers mainly under deduction of PAYE and National Insurance. Some of the teachers were self-employed making the taxpayer an employment intermediary.

The taxpayer was unaware that it should submit quarterly employment intermediaries returns for the self-employed teachers. When it did learn of the requirement it filed them. Because these were late HMRC imposed penalties under TMA 1970 s 98. The taxpayer appealed.

The First-tier Tribunal considered first whether the penalty notices were valid. The judge said s 98 penalties were governed by s 100 which stated that an officer of the board had to authorise these. This was a ‘real officer’ not a computer nor was it HMRC. This was in ‘stark contrast’ to penalties under FA 2009...