Validity of retrospective penalty notices

The taxpayer Advantage Business Finance Ltd was required under FA 2013 s 159 to make an annual tax on enveloped dwellings return on a property it bought in January 2016. The return was due by 30 April 2016 but was submitted late on 30 January 2017. HMRC imposed late filing penalties including daily ones (FA 2009 Sch 55). No tax was due. The taxpayer appealed.

The First-tier Tribunal considered the daily penalties first. Referring to the Court of Appeal decision in CRC v Donaldson [2016] STC 2511 the judge said HMRC’s letter dated December 2017 could not be construed as giving the requisite notice (para 4(1)(c)). The letter said the daily penalties of £900 related to the period of delay between 1 August and 29 October 2016 but the notice was retrospective in timing. ‘This is contrary to the requirement of a notice under...