“HMRC consider it to be the responsibility of the Taxpayer or Contractor to ensure that tax affairs are up to date, and that returns are submitted and this includes the paying over of CIS and PAYE deductions by the due date.”
“The Appellant has incurred the penalties because he failed to file the returns on time”
“ What is not clear, either from the Greengate Furniture decision or from any other material put before me, is whether the scheme is materially assisted in its purpose by the fixed nature of the penalty, regardless of the period of delay, the absence of any upper limit and the exclusion of a power to mitigate... ... I was nevertheless left with no material to counter Mr Conlon’s point that, while the system for penalising other delays in the accounting for and payment of taxes does allow for correspondence of the penalty with the period of delay, mitigation and, in some cases, an upper limit to the penalty , this scheme, for no evident reason, does not... I am quite willing to accept—indeed experience of its operation tells me—that the default surcharge regime, by and large, produces a fair penalty, or at least one which is not obviously disproportionate to the offence, albeit I have particular misgivings about the absence of any correlation between the period of delay and the amount of the penalty. But, as I have indicated, the penalty imposed in this case is in my view wholly disproportionate to the gravity of the offence—it is, as Simon Brown LJ put it in Roth, “not merely harsh but plainly unfair”—and I am not persuaded, in the absence of any justification of it, that it can be saved by the state’s margin of appreciation. It is, in my view, one of those exceptional cases which the tribunal had in mind in Greengate Furniture”
“At the end of the hearing we reserved our decision, informing the parties that we would consider the point of whether there was any overarching requirement for the penalties in issue to be proportionate to the relevant default and, if appropriate, list the appeal for further argument. Neither Mr. Culverhouse nor Mr. O’Leary was, perfect understandably, in a position to address argument to us on this point at the hearing We have considered the decision of the VAT and Duties Tribunal (Chairman: Theodore Wallace) in Greengate Furniture Ltd. v Customs & Excise [2003] UKVAT V18280 (11 August 2003 ). That decision (as the first paragraph states) was concerned with the proportionality...In particular, it concerned the absence of a power to mitigate the penalties. Whereas it might be difficult to conclude that a late filing penalty in relation to a return of actual payments made by a contractor within the CIS was “devoid of reasonable foundation”, the position is or may be different in relation to the penalties attaching to successive nil returns which are required to be made under regulation 4(10) of the Regulations. ...The Tribunal is left in doubt as to whether or not the statutory provisions for the penalty for late filing of a return under regulation 4 of the Regulations and the defence of reasonable excuse provided by section 118(2) TMA, without an explicit power in the Tribunal (or HMRC) to mitigate the penalty, satisfy the requirements of the Human Rights law principle of proportionality.”
“...it might be difficult to conclude that a late filing penalty in relation to a return of actual payments made by a contractor within the CIS was “devoid of reasonable foundation. ”