Evidence required to show penalties had been served

The taxpayer was a plastering and rendering contractor. It was registered for the construction industry scheme from April 2015. It appealed against 34 penalties imposed by HMRC under FA 2009 Sch 55 for the late filing of its construction industry scheme returns during the period August 2015 to January 2017.

The First-tier Tribunal noted that because the appeal was against penalties HMRC had to establish they were payable. The taxpayer said it had not received the penalty notices and HMRC did not dispute this. The problem for HMRC was therefore whether the notices had been served at all. 

The department could provide no evidence that the notices had been served. The process was an automated one with no copies kept although this according to the tribunal would not necessarily prove an ‘insuperable obstacle to HMRC discharging its burden’. However the difficulty was compounded by HMRC...