Case: Penalties quashed where HMRC evidence not reliable

Released 8 August 2018

[2018] UKFTT 0311 (TC)

Judge Dr Christopher McNall

Decision released 22 June 2018

Income tax – Penalties for failure to make self-assessment returns – FA 2009, Sch. 55 – Perrin v R & C Commrs [2018] BTC 513 – TMA 1970, s. 8 – Burgess; Brimheath Developments Ltd v R & C Commrs [2015] BTC 533.

Berry [2018] TC 06554


The Appeal was against penalties that HMRC has imposed under FA 2009, Sch. 55 for a failure to submit annual self-assessment returns for the years 2010/11, 2011/12, and 2012/13 on time. The Appellant had been a self-employed bookkeeper before becoming a self-employed livery manager. The Appellant contended that HMRC had informed her she need not continue to submit returns. SATRs were not submitted for 2010–11 to 2012–13 and for two of the three tax years, the Appellants income was below the personal allowance. For 2011–12 tax arose of £151.55.

The Tribunal was satisfied that Notices to File were issued, although could not be satisfied as to their content and whether they gave the appropriate statutory notice. Evidence provided by HMRC was generic although for 2010–11, internal records could be cross referenced to the generic documents and on balance it was found that those documents reflected the information that was sent to the Appellant. The Tribunal was not satisfied for 2011–12 nor 2012–13 that the notices were sent to the Appellant. The daily penalties for 2011–12 and 2012–13 were quashed.

The aggregate penalties were reduced to £2,700 against a tax liability of £150. It was argued that the penalties are disproportionate. The Tribunal confirmed that it did not have a general power to reduce a penalty on the grounds it was disproportionate.


The case is a reminder that even where tax liabilities are low, it does not prevent the incurrance of proportionately high penalties for a failure to make a return.

For further guidance on penalties for late returns or late notification of chargeability, see Direct Tax Reporter at ¶181-325.

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