In a parallel case with Hosking v HMRC [2023] UKFTT 943 (TC) involving the same “Sunrise solution”, the First-Tier Tribunal has reached the same conclusion and dismissed an application for a stay in the case of Wilson v HMRC [2023] UKFTT 944 (TC).
The appeal in respect of which this application was made concerned the imposition of a £300 penalty issued to the appellant by HMRC under FA 2008, Sch. 36, para. 39 and 46 for failure to produce information and documents requested by HMRC in respect of the appellant’s tax return for the tax year ended 5 April 2019 and in particular the appellants use of a disguised remuneration trust. The appellant had argued that the trust was void but, following an indication from HMRC that the status of the trust was not pertinent to the determination of the appeal against Sch. 36 penalties, the appellant made a formal application for stay.
In considering the matter, the tribunal judge stated:
” I note that the test which the Tribunal hearing the appeal against the Penalty is required to apply is as set out in Christine Perrin v HMRC . … Where the excuse advanced is that the Appellant reasonably believed that there was no obligation to comply the Tribunal must determine as a fact whether that belief was held and if so whether the belief was reasonable. The Appellant’s appeal against the Penalty states that AILRT (Agrochemex International Limited Remuneration Trust ) was void but notably it does not contend that the Appellant believed or had been advised that AILRT was void when he failed to comply with the Notice (some months previously). That it does not do so is entirely understandable in the context of the extensive correspondence between the Appellant’s representatives and HMRC throughout the period between the issue of the Notice and the imposition of the Penalty which centred entirely on whether the documents were within the Appellant’s possession or power. The validity of AILRT and its possible impact on the loan charge was a matter identified much later in the date. On the case as pleaded the status of AILRT at the point at which payments were made to or by it and in March 2019 when it is claimed that any outstanding loans were repaid has no bearing on whether the Appellant has complied with the Notice or had a reasonable excuse for not doing so and therefore does not justify a stay of this appeal against the Sch 36 Penalty. … I refuse the application.”
https://www.bailii.org/uk/cases/UKFTT/TC/2023/TC08981.html
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In Schedule 36 Notices – HMRC Information Requests, tax barrister Keith Gordon encourages full compliance with legitimate requests from HMRC but also recommends that taxpayers should stand up to requests that do not meet the strict statutory criteria. The author reminds professional advisers of the risks of providing more information than the law requires.
