Penalties were disproportionate against taxpayer’s income

The taxpayer set up his business in 2012. He usually engaged an accountant to file his company and personal tax returns. But when the business started to decline he completed his personal returns himself. He submitted the returns for 2015-16 and 2016-17 late and HMRC imposed penalties.

The taxpayer appealed against the penalties.

The First-tier Tribunal found first that HMRC had served the late filing penalties correctly. However the tribunal was not satisfied that the department issued the daily penalties warning letters. It produced no evidence to show the date the letters would have been sent. Therefore the taxpayer’s appeal against the daily penalties was allowed.

The next question was whether the taxpayer had a reasonable excuse for the late filing of his returns.

The taxpayer said he had trouble logging on to HMRC’s self-assessment pages when he tried to file his 2015-16 return. The tribunal did not consider this...