Tax return was withheld deliberately

The taxpayer submitted his 2015-16 tax return in August 2019 which was more than two years late. In the meantime HMRC issued late filing penalties and raised an assessment based on information on from other sources. The taxpayer appealed.

He said the late filing was not the result of deliberate behaviour but that there were mitigating circumstances. In essence he was experiencing severe problems trying to keep his business afloat during 2017 and 2018 and he knew would be unable to pay the tax due for 2015-16. He had also been taken ill.

The First-tier Tribunal found the taxpayer to be ‘conscientious honest and wholly credible’ and his anxiety was ‘clearly visible as he gave evidence’. However as the taxpayer acknowledged his decision not to file his return on the due date was ‘something he consciously decided to do’. In so doing he withheld...