Ahmed v Revenue & Customs [2011] UKFTT 196 (TC)

FTT-Tax
Ahmed v Revenue & Customs
[2011] UKFTT 196 (TC) · 2011-03-21
[1]This is an appeal against a two default surcharges imposed pursuant to s.59C of the Taxes Management Act 1970 (the “TMA”) in respect of the late payment by the Appellant of tax due on 30 December 2009 in respect of the 2004/05 and 2005/06 tax years. The relevant legislation[2]Section 59B(6) of the TMA states in relevant part as follows: (6) Any amount of income tax or capital gains tax which is payable by virtue of an assessment made otherwise than under section 9 of this Act shall, unless otherwise provided, be payable on the day following the end of the period of 30 days beginning with the day on which the notice of assessment is given .[3]Section 59C of the TMA states in relevant part as follows:(1) This section applies in relation to any income tax or capital gains tax which has become payable by a person (the taxpayer) in accordance with section 55 or 59B of this Act.(2) Where any of the tax remains unpaid on the day following the expiry of 28 days from the due date, the taxpayer shall be liable to a surcharge equal to 5 per cent of the unpaid tax.(3) Where any of the tax remains unpaid on the day following the expiry of 6 months from the due date, the taxpayer shall be liable to a further surcharge equal to 5 per cent of the unpaid tax. ... (5) An officer of the Board may impose a surcharge under subsection (2) or (3) above; and notice of the imposition of such a surcharge— (a) shall be served on the taxpayer, and (b) shall state the day on which it is issued and the time within which an appeal against the imposition of the surcharge may be brought. ... (7) An appeal may be brought against the imposition of a surcharge under subsection (2) or (3) above within the period of 30 days beginning with the date on which the surcharge is imposed. ... (9) On an appeal under subsection (7) above that is notified to the tribunal section 50(6) to (8) of this Act shall not apply but the tribunal may— (a) if it appears that, throughout the period of default, the taxpayer had a reasonable excuse for not paying the tax, set aside the imposition of the surcharge; or (b) if it does not so appear, confirm the imposition of the surcharge. (10) Inability to pay the tax shall not be regarded as a reasonable excuse for the purposes of subsection (9) above. ... (12) In this section— “the due date”, in relation to any tax, means the date on which the tax becomes due and payable; “the period of default”, in relation to any tax which remained unpaid after the due date, means the period beginning with that date and ending with the day before that on which the tax was paid. The evidence[4]The evidence shows that notices of assessment were issued to the Appellant in respect of the 2004/05 and 2005/06 tax years on 30 November 2009 (folios 1-4 of the HMRC bundle) . Payment of amounts due pursuant to those assessments was therefore due within 30 days of the notice of assessment, that is, by 30 December 2009, pursuant to s.59B(5) of the TMA. Each of the notices of assessment included a table showing how the amounts charged had been calculated. The notices of assessment stated that “If you have any doubts or do not understand this notice please contact this office or your local tax office for advice”.[5]There is nothing in the material before the Tribunal to suggest that the Appellant sought to appeal against the assessments themselves.[6]Surcharges in the amount of 5% of the amount of tax due for each of the tax years were imposed under s.59C(2) and (3) of the TMA on 16 February 2010 and 11 August 2010 respectively.[7]By a letter dated 15 March 2010, the Appellant indicated that he wished to appeal against the surcharges imposed on 16 February 2010. By a letter dated 10 August 2010, HMRC upheld the decision to impose those surcharges, and advised the Appellant that if he disagreed he could request HMRC to carry out an independent review of the decision or could continue the appeal by sending it to the Tribunals Service.[8]On 5 September 2010, the Appellant requested an independent review of the decision. On the form requesting the review, the reason why he disagreed with the HMRC assessment was stated to be as follows:
“ I do not agree with the tax charged figure, I was not provided with background relating to how this tax figure was calculated. Please provide a detailed review of exactly how this tax figure was calculated. I am not liable for this assessment. This assessment is wrong .”
[9]A letter from HMRC to the Appellant dated 9 November 2010 advised him that following the independent review, the decision in the 10 August 2010 letter would be upheld. The letter advised the Appellant of his right to appeal to the Tribunal.[10]The Appellant’s notice of appeal to the Tribunal is dated 7 December 2010. His sole stated grounds of appeal are that “I was not provided with the background detail relating to how the tax figures were calculated by HMRC, so this assessment is not a valid assessment”.[11]Upon its consideration of the material before it, the Tribunal is not persuaded that the HMRC assessments were legally invalid by reason of failure by HMRC to provide necessary information to the Appellant.[12]If the Appellant was dissatisfied with the assessments themselves, there are avenues by which the Appellant could have challenged them. There is no suggestion in the material before the Tribunal that he did so. The Tribunal accordingly proceeds on the basis that the assessments were valid and that the Appellant was required to pay the amounts assessed by 30 December 2009.[13]The Tribunal finds that in circumstances where a taxpayer has not challenged an assessment itself, the taxpayer cannot simply decline to pay the tax on the ground that the taxpayer is not satisfied as to how the assessment has been calculated by HMRC.[14]The Tribunal therefore finds that the Appellant’s claimed lack of understanding as to how the figures in the assessments were arrived at does not amount to a reasonable excuse for failing to pay the tax.[15]The Appellant has not advanced any other circumstance that are said to amount to a reasonable excuse. T he Tribunal therefore dismisses the appeal and confirms the imposition of the surcharges .[16]This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. DR CHRISTOPHER STAKER TRIBUNAL JUDGE RELEASE DATE: 21 MARCH 2011