Heaney -Irving v Revenue & Customs [2011] UKFTT 785 (TC)

FTT-Tax
Heaney -Irving v Revenue & Customs
[2011] UKFTT 785 (TC) · 2011-12-05
[7]Therefore, as there has been a failure to file the Return Mrs Heaney-Irving is liable to a penalty of £100 in accordance with s 93(2) TMA unless she has a reasonable excuse for the failure which continues throughout the period of default in which case the penalty may be set aside. There is no definition in the legislation of “ reasonable excuse ” which has been held to be “a matter to be considered in the light of all the circumstances of the particular case” (see Rowland v HMRC [2006] STC (SCD) 536 at [18]). 8. In this particular case the Return was not filed because the accountant, on whom Mrs Heaney-Irving relied to submit it on her behalf, failed to do so. It is therefore necessary to consider whether this amounts to a reasonable excuse.[9]In Rowland v HMRC and other cases (eg Devon & Cornwall Surfacing Limited v HMRC [2010] UKFTT 199 ) the Tribunal has held that reliance on a third party, such as an accountant, can be a reasonable excuse in a direct tax context. 10. However, as the Tribunal Judge (Dr Christopher Staker) noted in The Cove Fish & Chip Restaurant Ltd v HMRC [2011] UKFTT 625 (TC) at [13]:[13]“… reliance on a third party “can” be a reasonable excuse, not that it necessarily always will be a reasonable excuse.” 11. It is also clear that the responsibility for filing a self-assessment tax return remains that of the individual taxpayer even where, as in this case, an accountant has instructed to prepare and submit the self-assessment return to HMRC on his client’s behalf. In Jeffers v HMRC [2010] UKFTT 22 (TC) Sir Stephen Oliver QC (the then President of the Tribunal) said, at [17]:
“The obligation to make the tax return on time is nonetheless the taxpayer’s. It remains his obligation regardless of the fact that he may have delegated the task of making the return to his agent. There may be circumstances in which the taxpayer’s failure, through his agent, to comply with, eg the obligation to make the return on time can amount to a “reasonable excuse”
. To be such a circumstance it must be something outside the control of the taxpayer and his agent or something that could not reasonably have been foreseen. It must be something exceptional.” 12. Jeffers was followed by the Tribunal (Judge Charles Hellier and Mr Peter Laing) in Bushell v HMRC [2010] UKFTT 577 (TC) where it was said, at [56 – 57]: [56] “It seems to us that reliance on an agent may be an excuse or a reason for non compliance, but such reliance is normal and customary, and the statute cannot have intended such reliance to constitute a reasonable excuse in every case. It seems to us that it cannot be the intention of legislation to permit the reliance on a competent person who fails unreasonably to fulfil the task with which he is entrusted to absolve the principal in all cases. [57] We concur with the President when he said that to be a reasonable excuse the excuse must be something exceptional. In our view, in determining whether or not that is the case it may be necessary to consider why the agent failed (and thereby to regard the agent as an arm of the taxpayer). To give a simple example, if a return was given to someone to post, and that person failed to do so, the reasons for that failure will illuminate whether or not there is a reasonable excuse: if the messenger was run over by a bus the position will be different from the case where the messenger merely forgot.” 13. Although the failure to file the Return in the present case may have been outside the control of Mrs Heaney-Irving I am unable to find any evidence that it was beyond the control of her accountant who, if the information regarding the trust income was necessary for the completion of the Return could, and should, have requested it before the filing deadline. Even if this was outside of the accountant’s control as it is, in my judgment, clearly a matter that was reasonably foreseeable and certainly not something that could be described as “exceptional” I am unable to find that there was a reasonable excuse for the failure to submit the Return. 14. In the circumstances I have no alternative but to dismiss the appeal and confirm the penalty. 15. 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. JOHN BROOKS TRIBUNAL JUDGE RELEASE DATE: 5 DECEMBER 2011

Cited in 3 later judgments