In yet another case allowing the appeal against HMRC’s P35 late filing penalty the First-tier Tribunal has once again decided in favour of the tax payer (HD Response International v HMRC [2011] UKFTT 472 (TC) – TC01322)
The facts and circumstances of the case were similar to an earlier one on the same subject HOK Ltd v HMRC (http://www.taxpartnersuk.com/news_detail.php?news_id=65). However, in this case the judges were even more critical noting that HMRC was ‘a manifestation of the State’ and that it was ‘no function of the State to use the penalty system as a cash generating scheme’. Also, the tribunal ruled that the company’s accountant in ‘genuinely believing’ to have filed the return online has established a ‘reasonable excuse’. This goes against HMRC definition of ‘reasonable excuse’ where it expects some exceptional event beyond the taxpayer’s control to prevent it from sending its return on time.
Despite a series of these cases being decided in the taxpayer’s favour, it is too much to expect that it will finally put an end to HMRC’s system-generated P35 penalty regime that gets running mid-September on!
