Ricketts v Revenue and Customs (Penalties - Late filing) [2025] UKFTT 422 (TC) (09 April 2025)

DECISION

Introduction

1. With the consent of the parties, the form of the hearing was V (video) held on Teams.

2. The Appellant did not attend the hearing. Having first confirmed that the Appellant had been sent the notification of the hearing and the joining instructions, the Tribunal considered whether to hold the hearing in his absence. Having regard to the overriding objective, we decided to proceed with the hearing in order to consider the appeal, conscious that there would be an opportunity for either party to appeal our decision should they wish to.

3. The documents to which we were referred are HMRC's Amended Statement of Reasons, an Amended Documents Bundle of 48 pages and an authorities bundle of 151 pages.

4. Prior notice of the hearing had been published on the gov.uk website, with information about how representatives of the media or members of the public could apply to join the hearing remotely in order to observe the proceedings. As such, the hearing was held in public.

Issues

5. This was an appeal against the following late filing penalties charged under Schedule 55 to the Finance Act 2009 (Schedule 55) and relating to the Appellant's self assessment tax return for the tax year ending 5 April 2022.

(1) Initial late filing penalty of £100 issued on 14 February 2023 (under para 3, Schedule 55); and

(2) Daily late filing penalty of £510 issued on 27 June 2023 (under para 4, Schedule 55).

6. Under Schedule 55, a person is liable to a penalty if they fail to make or deliver a return that is required to be made or delivered to HMRC on or before the filing date (i.e. the date by which it is required to be made or delivered).

7. A self assessment tax return is within the scope of the Schedule 55 penalty regime if it is required to be filed.

8. The amounts of the penalties under Schedule 55 are fixed. The initial penalty for a late return is £100 (para 3). If the return remains outstanding three months after the day after the filing date, a further penalty of £10 for each day the return remains outstanding is payable if HMRC decide that it should be payable and give notice to the person, specifying the date from which the penalty is payable (para 4).

9. Where a self assessment tax return was required and has been filed late, penalties under Schedule 55 apply provided HMRC notifies them correctly.

10. In circumstances where penalties have been applied in accordance with the rules, a person may nonetheless appeal to HMRC and/or the Tribunal for the penalties to be disapplied on the basis that they had a reasonable excuse for the failure to make or deliver the return on time and that they put right that failure (i.e. filed the return) without unreasonable delay after the excuse had ended (para 23, Schedule 55).

11. There are therefore three main points for the Tribunal to consider in this case:

(1) Was the Appellant's self assessment tax return for the year ended April 2022 required to be made or delivered?

(2) If it was, were the penalties raised correctly?

(3) If they were, was there a reasonable excuse and was the return filed without unreasonable delay after it ended?

Consideration 1

12. Under section 8 Taxes Management Act 1970, a person is required to file a self assessment tax return if notified to do so by HMRC.

13. The question of whether the Appellant was required to file a tax return for the year ended April 2022 therefore depends on whether he was notified to do so. Notification can be by electronic means provided that HMRC have previously secured the taxpayer's consent to using electronic communications, which they may do through the self assessment online service or the (currently voluntary) Making Tax Digital for Income Tax Self Assessment service, for taxpayers who are registered users of such online services and have consented to paperless communications, and not revoked that consent (see Income and Corporation Taxes (Electronic Communications) Regulations 2003).

14. HMRC demonstrated through documents included in the Amended Documents Bundle that:

(1) The Appellant signed up to receive paperless communications on 24 January 2022;

(2) HMRC issued a notice to file for the tax year ended 5 April 20222 to the Appellant via his online personal tax account (PTA) on 6 April 2022; and

(3) The Appellant read the online PTA message on 22 May 2022.

15. The Appellant did not dispute any of these facts in his Grounds of Appeal.

16. We must therefore conclude that the return was required to be made.

Consideration 2

17. As outlined above, an initial penalty of £100 is due if the required return is not filed by the date on which it is due and further daily penalties arise if it remains outstanding three months after the date after the date it was due (referred to in the legislation as the penalty date).

18. HMRC demonstrated through documents included in the Amended Documents Bundle that the Appellant's return for the year ended 5 April 2022 was received in electronic form on 20 June 2023.

19. The Appellant did not dispute the date on which the return was filed in his Grounds of Appeal so we accept these facts shown by HMRC.

20. The due date for an electronic tax return is 31 January following the end of the tax year of the return. So the due date for an electronic tax return for the year ended 5 April 2022 is 31 January 2023.

21. The Appellant's tax return was not filed by 31 January 2023, so the initial £100 penalty is due.

22. The penalty date in this case is 1 February 2023 (the day after the date the return was due). The return was not filed until 20 June 2023, so it was outstanding three months after that, meaning the additional penalties can be raised. Those penalties are set at £10 for each day the return is outstanding after the end of the period of three months beginning with the penalty date up to a maximum of 90 days. The return was outstanding for more than 90 days after 1 February 2023.

23. HMRC demonstrated through documents in the Amended Documents Bundle that it had notified the Appellant of the penalties and the Appellant did not contest this fact in his Grounds of Appeal.

24. We must therefore conclude that the penalties were validly issued under Schedule 55.

Consideration 3

25. The final consideration is whether there is a reasonable excuse for the late filing and, if there is, whether the return was filed without unreasonable delay after the reason ended.

26. The legislation does not define what constitutes a reasonable excuse, but it does specify two situations that cannot be a reasonable excuse, which are:

(1) An insufficiency of funds; and

(2) Reliance on another person, unless the person took reasonable care to avoid the failure.

27. We would note that in case of an insufficiency of funds, there are other options available to taxpayers, for example requesting payment plans etc directly with HMRC (which this Tribunal has no jurisdiction to consider).

28. There is extensive case law on the second point, some of which was included in the Authorities Bundle. We will not recite it here but would summarise that it is clear from the case law that relying on another person to complete or help complete one's tax return, even where that person is a professional, cannot constitute a reasonable excuse absent exceptional circumstances.

29. The Appellant's grounds of appeal all appear to fall under this third consideration. Whereas the burden of proof was on HMRC to demonstrate that the penalties were properly raised under the first two considerations, when it comes to reasonable excuse, the burden of proof is on the taxpayer to make their own case.

30. We have read and considered the Appellant's grounds of appeal which are contained in the Amended Documents Bundle.

31. The Appellant's reasons for not filing his return on time can be summarised as follows:

(1) He and his wife, who helped him, did not think the return was required because:

(a) He did not owe any tax

(b) They believed HMRC already had all the information on his earnings etc under the Pay As You Earn system and from Covid Grant sources.

(2) He has limited knowledge of UK tax law, being a Canadian national who has spent many years living and working in Spain. His wife is Spanish and may have assumed the requirements in the UK were the same as those in Spain.

(3) The system has become so complicated in recent years as a result of Covid and Brexit that is it almost impossible for anyone to understand without professional help, which he could no longer afford since his business as a freelance tutor was destroyed by the Covid pandemic.

32. Unfortunately, whilst we have sympathy for the difficulties the Appellant has had, a lack of familiarity with the UK tax system does not constitute a reasonable excuse since the information needed in most cases is available and support can be also sought from HMRC directly. The other points raised by the Appellant appear to fall within the categories that are specifically excluded from being a reasonable excuse.

33. In the absence of any further evidence, we must therefore conclude that the Appellant did not have a reasonable excuse.

34. As a result, the penalties stand.

Decision

35. The appeal is dismissed.

Right to apply for permission to appeal

36. 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.

Release date: 09^thAPRIL 2025

	[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE]
	First-tier Tribunal (Tax)
You are here: BAILII >> Databases >> First-tier Tribunal (Tax) >> Ricketts v Revenue and Customs (Penalties - Late filing) [2025] UKFTT 422 (TC) (09 April 2025) URL: https://www.bailii.org/uk/cases/UKFTT/TC/2025/TC09488.html Cite as: [2025] UKFTT 422 (TC)

First-tier Tribunal (Tax)