Case: Notice of penalty not valid

Released 7 August 2018

[2018] UKFTT 0380 (TC)

Judge Richard Thomas

Decision released 20 June 2018

Income tax & National Insurance contributions – Real Time Information returns of payments (FPS) – penalties imposed for late FPS during 2 months – Whether penalty assessments conformed with FA 2009, Sch. 55, para. 18(1)(c) – No – Whether TMA 1970, s. 114(1) applies – No – Appeals allowed.

J & L Benson Building Services Ltd [2018] TC 06546


The Appeal was against assessment of for the failure during two consecutive months to deliver a return of payments of PAYE income by the relevant due dates.

The grounds of appeal were not included because a copy of the notice of appeal was not included. A document exhibited by HMRC contained a brief summary of the grounds that must have been given. The appellant’s director had admitted the failure and stated lack of knowledge of how to file a return when he owed no money. In the notice of appeal the director stated he was the only full time employee, does the paperwork in his spare time and occasionally misses deadlines.

The Tribunal considered whether the notice was valid. A requirement is that the notice of assessment show the period in respect of which the penalty was assessed. No record of the notice or of the assessment was been provided and the Tribunal were unable to ascertain its validity. The specimen notice of penalty assessment provided did show that a period is referred to although the year was left blank.

The Tribunal considered that a quarter was not the period in respect of which the penalty was assessed. Two penalties were assessed, one which related to the month ended 5 June and the other 5 July. The Tribunal found it was those periods that were required to be shown on the notice.

A further problem was that the specimen notice stated that full details about how HMRC have worked out the penalty were shown on page 3. Page 3 was not included.

The Appellant referred to tax being due of less than £30 at one place and no tax being due in another. A redacted document suggested that the tax due in respect of the two months was nil. The Tribunal found that the redactions meant the documents did not alleviate doubts about whether a recipient would be objectively misled by the notice of assessment.

The penalties were cancelled.


The case is a reminder of the importance to check the validity of notices and whether there are any errors within them.

For further guidance on penalties for PAYE and CIS late payments and returns, see Direct Tax Reporter at ¶184-975.

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