The First-tier Tribunal (FTT) refused to allow an appeal in a case where the taxpayer’s default was held to be deliberate and where there were no special circumstances (Futcher v HMRC  UKFTT 401 (TC)).
Although the taxpayer was found to be “a conscientious, honest and wholly credible witness”, and although the FTT had sympathy for him (not least because he had some severe health issues), the taxpayer had admitted that he chose to delay the submission of his tax 2015-16 return for financial reasons:
“At the filing date Mr Futcher was well aware of his obligation to file his 2015/16 tax return. The acute financial difficulties which followed Toys R Us’ publicised difficulties did not start until later in 2017. His physical and mental illnesses did not manifest themselves in an extreme form until 2019. Whilst we accept that mental and physical illnesses of the type Mr Futcher described do not spring up overnight, there is no evidence before us to suggest that Mr Futcher was suffering from these conditions in the period running up to the filing date or that at that time the business was making the acute demands on his time it did later. Indeed, it is clear from the letter Mr Futcher wrote to HMRC on 16th October 2019 that in January 2017 he had time to consider his tax position and made a conscious decision not to file his return on time. It was not illness or acute business pressures that prevented him filing his tax return in January 2017. He did not file his return because he had decided not to.”
Nor were there any “special circumstances” that the FTT could take into account, as he “had made a deliberate, conscious decision not to file his tax return. He was not a taxpayer who, on the filing date, was doing his best to comply with his obligations; he was a taxpayer who had already decided to default.”
It did not appear to the FTT that the taxpayer’s circumstances “at any point before the paragraph 6 penalty was triggered could be described as ‘sufficiently special that it is right to reduce the amount of the penalty’; Edwards v HMRC,  UKUT 131 (TCC) at ”.