A tribunal finds the taxman acted unreasonably in fining a taxpayer after a dispute over paper and online tax returns
A TRIBUNAL said that HMRC had acted in an “unconscionable manner” when dealing with a late self-assessment filing.
Kathleen Lomas was first told she had to complete a tax return in January last year, when HMRC sent her a paper form, which she returned before the 31 January deadline. However, HM Revenue & Customs then hit her with a £100 fine plus interest because paper returns were due by 31 October 2010.
Lomas had not been informed by the taxman that she had to file electronically or that 31 January was the deadline for online returns only.
Judge Geraint Jones QC said: “The fact that HMRC did not return the paper tax return and insist that the appellant must file online leads me inexorably to the conclusion that it did, by its conduct, waive the requirement for the paper return to be filed by 31 October 2010 and/or for the appellant to file online by 31 January.
“She lost the opportunity to file online within time and thus avoid any penalty. It is not for HMRC to act in such an unconscionable manner.”
There are, however, about 630,000 people who were due to file tax returns for the financial year that ended on April 6, 2011, but have still failed to do so since the deadline on 31 January, this year.
They have already been hit with automatic £100 fines, as well as additional penalties of £10 per day since 1 May, capped at £900.
Taxpayers with returns outstanding after 31 July will be hit with penalties of £300 or 5% of their tax bill – whichever is higher – as part of a crackdown on unpunctual taxpayers.