Case: Generic records not evidence, total confusion not reasonable excuse

Released 8 August 2018

[2018] UKFTT 0344 (TC)

Judge Dr Christopher McNall

Decision released 23 June 2018

Income tax – Partnership and Individual Partner – Late Payment Penalties – Daily penalties – FA 2009, Sch. 55 – Perrin v R & C Commrs [2018] BTC 513 – Burgess; Brimheath Developments Ltd v R & C Commrs [2015] BTC 533 – Islam (t/a Zainub Takeaway) [2017] TC 05814 – Sudall [2017] TC 05868 – Halfaoui [2018] TC 06292 – Donaldson v R & C Commrs [2016] BTC 28 – Clarks of Hove Ltd v Bakers' Union [1978] 1 WLR 1207.

Spacia Grocers (a Partnership); Mughal [2018] TC 06559


The Appeal was against penalties under FA 2009, Sch. 55 in relation to a partnership and the partners failures to submit annual self-assessment returns for the year ending 5 April 2011 on time.

The Tribunal noted that before the consideration of any reasonable excuse the initial burden lies on HMRC to establish that events have occurred because of which a penalty is due. Sufficient evidence is required to prove the relevant facts relating to the lawful imposition of a particular penalty on the balance of probabilities.

HMRC had provided evidence being internal print-outs indicating that correspondence and documents were sent out to the Appellants. That evidence did not establish what the content of those documents was, nor whether appropriate notice that daily penalties would be charged. HMRC had failed to establish that the daily penalties were imposed following the giving of the notice required by Sch. 55, para. 4(1)(c). The daily penalties were quashed.

The Tribunal considered whether either Appellant had a reasonable excuse for the late filing. A reason provided set out that the accountants who had acted for the Appellants since 1980, had ceased work in February 2011. The Accountants had done so because costs had not been paid for work done since August 2005. The Accountants had refused to return client records. The Appellant had prepared their own return although did not realise the need for a partnership return. The Appellant admitted total confusion. The Tribunal found there was no reasonable excuse for the late filings.


The case closely follows Moulsdale (t/a Moulsdale Properties) [2018] TC 06539, which also found HMRC’s evidence to support penalties lacked substance. When corresponding with HMRC on penalties, it may be prudent to request they provide evidence for daily penalties.

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

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