Overview Of Taxpayer Appeal Fails Due To Address Mistake
This post Taxpayer Appeal Fails Due To Address Mistake sprouts straight from the case of Lawati v Revenue And Customs [2022] UKFTT 230 (TC) in which Mr Lawait (the taxpayer) failed in his appeal against late filing and payment penalties.
The taxpayer appealed on the basis that he had not received notice of the penalty and was said to have become aware of the matter only after seeking tax refunds later on.
Penalty notices were issued from 26 March 2019 through to 18 February 2020 but a letter of appeal was not issued until 21 March 2021.
When the matter came before the Tax Tribunal it was only the 2017-2018 tax return penalty that was up for discussion in the end and in that period there was no tax to pay. However, the taxpayer was still landed with an HMRC tax penalty of £1,600 due to the non-submission of an HMRC tax return.
The problem was that the taxpayer had been registered as self-employed on 10 March 2018 but had failed to submit a return for the period 2017-2018 until 21 March 2021.
Rules On Appealing Out Of Time
Appealing against an HMRC tax penalty late is difficult due to strict requirements.
These are set out in Martland v HMRC [2018] UKUT 178, which follows the approach in Denton v White [2014] EWCA Civ 90. In deciding whether to allow the application requiring HMRC to consider the late appeal the taxpayer had to:
(1) establish the length of the delay and whether it is serious and/or significant;
(2) establish the reason(s) why the delay occurred; and
(3) evaluate all the circumstances of the case, using a balancing exercise to assess the merits of the reason(s) given for the delay and the prejudice which would be caused to both parties by granting or refusing permission, and in doing so take into account “the particular importance of the need for litigation to be conducted efficiently and at proportionate cost, and for statutory time limits to be respected”.
Address Change Notification Not In Time
The taxpayer said he was unaware of the late payment penalty. However, he had not notified HMRC of a change of address on a timely basis.
The problem for the taxpayer was it appears there was a mistake in one of the tax returns with an incorrect address. It appears there was a later correction to update the relevant address for the taxpayer.
The Tax Tribunal was satisfied that there was no evidence of a mistake on HMRC’s part in serving notices.
The Appeal By The Taxpayer
The taxpayer sent an agent to the hearing but did not attend personally and did not submit evidence save through his agent’s submissions.
The Tax Tribunal found the delay significant and serious and accordingly dismissed the appeal.
Oliver Elliot Observation
When you change your address there are a whole host of people you need to notify to get your records in order with third parties such as the DVLA (if you drive), friends and relatives (who are deemed welcome visitors to your humble abode), banks and building societies, utility companies, your employer and last but certainly not least HMRC.
In this case, it can be seen how a failure to update records can prove to be so expensive, and yet it appears to have been avoidable. Even therefore potentially unwelcome ‘visitors’ may need to be kept fully appraised of your movements on a timely basis and it can be in your interests to do so, particularly if you might have statutory responsibilities to them.
In this case, it is hard not to feel sympathetic toward the taxpayer but rules about filing tax returns tend to be strictly enforced and so warrant due respect.
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Disclaimer: Taxpayer Appeal Fails Due To Address Mistake
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