Agent’s lack of knowledge was not a reasonable excuse

In August 2020 the taxpayer bought a property. As a property developer the taxpayer was entitled to an exemption from the annual tax on enveloped dwellings (ATED). The exemption had to be claimed in its ATED return which was due a month after the property purchase.

In August or September 2020 the taxpayer’s agent telephoned HMRC for guidance because they had not previously encountered ATED. HMRC replied that they were working from home were very busy and were unable to give advice.

The agent could not recall if they had looked at the HMRC website. The ATED return was filed in May 2021 and HMRC charged late filing penalties (FA 2009 Sch 55).

The taxpayer appealed.

The First-tier Tribunal said the responsibility for filing an ATED return on time rested ‘squarely with the taxpayer’. There was no obligation on HMRC to issue a notice to file since...