[2010] UKFTT 311 (TC)

TC00598

Appeal number: TC/2009/11224

DIRECT TAX – late filing penalty –penalty notice shown as issued by retired HMRC officer- whether penalty properly determined

FIRST-TIER TRIBUNAL

TAX 

	H J ASHENFORD	Appellant

	- and -

	THE COMMISSIONERS FOR HER MAJESTY’S
	REVENUE AND CUSTOMS	Respondents

		TRIBUNAL: 	Barbara Mosedale (TRIBUNAL JUDGE)			
				William Silsby (TRIBUNAL MEMBER)						

Sitting in public in Birmingham on 3 September 2009

The Appellant in person

Mr Reading, officer of HMRC, for the Respondents

© CROWN COPYRIGHT 2010

DECISION

1.	Mr Ashenford appealed against a fixed penalty of £400 charged under s98A TMA 1970 for failure in four consecutive months to make a P35 Annual Employer Return for the year to 5 April 2008.  Although there was a single determination dated 3 October 2008, it was for all 4 defaults (each charged at £100) for the four months from May 2008.
2.	At the start of the hearing the Tribunal Member declared to the parties that he had a professional connection with Mr Mike Christensen whose name appeared as that of the HMRC officer who had imposed the penalty in this case.  The Tribunal Member explained that he had previously co-chaired a local Working Together group with Mr Christensen.  Although not personal friends, their acquaintance was such that Mr Christensen had provided a reference in respect of Mr Silsby in connection with his application for appointment as a Tribunal Member.  We asked if either party wished Mr Silsby to be excluded from the panel hearing the case:  the Judge could continue alone.  Both Mr Reading for HMRC and Mr Ashenford said that they were both quite happy for Mr Silsby to continue on the panel.  Mr Reading mentioned that Mr Christensen was now retired from service with HMRC.
3.	Both parties addressed the Tribunal on whether they considered the Appellant had a reasonable excuse for the late filing of the P35.  The panel then asked HMRC the date of Mr Christensen’s retirement.  Mr Reading confirmed this with his office by telephone and reported that Mr Christensen’s last day in the office was 8 August 2008 but his official last day as an officer of HMRC was 31 August 2008.
4.	Mr Reading’s evidence was that Mr Christensen was area director for HMRC up to his retirement on 31 August 2008.  From that date a new area director was appointed.  However, the print run for penalty notices was not immediately changed to reflect the new appointment.  The penalty notice issued to Mr Ashenford states that it was “issued by” Mr Christensen.
5.	The panel then asked Mr Reading if, notwithstanding the penalty notice purporting to have been issued by Mr Christensen, another HMRC officer would have formally authorised the penalty.  His evidence was that so many penalties are issued that no officer sees the forms.  There is no “book of penalties” signed off by any HMRC officer as there would for example have been in relation to assessment notices before the advent of computerisation.  The penalties are automatically generated from the computer without specific authorisation by an HMRC officer.
6.	Mr Reading said that HMRC would rely on the name on the penalty notice as being the name of the authorising officer who determines the penalty.  No other officer would have authorised it.
7.	The Tribunal retired to consider the issue whether the penalty was properly imposed.  We found that Mr Christensen could not have been an officer of the Board authorised by the Board for the purposes of s100 Taxes Management Act 1970 at the time when the penalty was stated to be imposed as he had retired from employment as an officer of HMRC before the date the penalty was issued.  We decided that as Mr Reading’s evidence was that no other HMRC officer had determined the penalty, the penalty could not stand.  It was improperly issued.
8.	That concluded the appeal in favour of the Appellant and we did not need to go on to consider the issue of reasonable excuse.
9.	This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009.   The application must be received by this Tribunal not later than 56 days after this decision is sent to that party.  The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.

TRIBUNAL JUDGE
RELEASE DATE: 6 July 2010