The First-tier Tribunal have ruled in the case of Cruise v HMRC [2023] UKFTT 41 (TC).
Mr Cruise had appealed penalties for the late filing of his income tax return for the tax year 2019-20. He had signed up for HMRC’s online service and the notice to deliver a tax return and subsequent penalty notices resulting from his failure to submit had been delivered to the secure mailbox in his online Personal Tax Account. He had also received email alerts to his verified email address notifying him that there were messages for him in his account.
Mr Cruise appealed the penalties on the grounds that:
- The details of the tax that needed to be paid and the fines that were accruing were not sent to his home address but were sent electronically to a company he believed had been closed down in March 2020.
- He was not given any notice that late filing penalties were accruing until he received a letter in October 2021 that showed the amount owed and details of the penalties charged.
- HMRC had not provided proof that they contacted him prior to October 2021 other than electronically, and he would not have checked this as he believed that his company had been closed.
- He employed an accountant to ensure that his books were filed and did not realise that he would be held to account for any errors made.
It was held by the tribunal that the penalties were correctly charged in accordance with the law.
It was also held that that none of Mr Cruise’s grounds for appeal constituted either a reasonable excuse or that any special circumstances applied. Specifically:
- Mr Cruise had confused his personal tax affairs with those of his company that he had previously closed down and had thus used the company email address as his notification address for his Personal Tax Account. Failing to check his account or emails was not a reasonable excuse.
- This confusion between his personal affairs and the company’s affairs was not a reasonable excuse in that if he had read the messages the confusion would have been clarified. Furthermore, he had submitted personal tax returns in the past so was aware of his responsibilities.
- As he had chosen to sign up for the online service and there were electronic records showing that notifications and email alerts had been issued it was not a reasonable excuse to argue that he had not received notifications of the notice to deliver or subsequent penalty notices.
- With regard to the employment of an accountant it is a matter of law that where a taxpayer has relied on any other person to do anything that cannot be a reasonable excuse unless the taxpayer took reasonable care to avoid the failure. Mr Cruise provided no evidence that he had taken such care.
The tribunal therefore upheld the penalties.
https://www.bailii.org/uk/cases/UKFTT/TC/2023/TC08696.html
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