RPM (A Partnership) v Revenue & Customs (INCOME TAX/CORPORATION TAX : Penalty) [2018] UKFTT 484 (TC)
[2](1) Under s 12AA(2) TMA 1970 where a partnership is sent a return the representative partner is required to complete it and send it back by the filing date;[3](2) Section 93A (2) TMA 1970 stipulates that where the representative partner fails to comply with the notice all partners are liable to a penalty of £100 each. The penalty applies to each partner who was a member of the partnership during the return period.15. It is not disputed that the partnership was registered with HMRC in March 2017 and it is not disputed that a UTR number for the partnership was issued on 30 March 2017.16. In a review conclusion letter of 15 December 2017 HMRC stated that “the partnership return was issued on 30 March 2017”. The appellant denies having received that return. However, in a decision letter dated 17 October 2017, HMRC state that a “notice to file for 2015/16 was issued on 30 March 2017 [informing the partnership] that you had until the 6 July 2017 to file [the return]” and the appellant does not deny having received that notice to file. Indeed, the response to that decision letter refers only to difficulties with registration of the agent authorisation.17. Accordingly, I find that the appellant received the notice to file sent on 30 March 2017 and was therefore aware of the need to file a return for the 2015/16 tax year by 6 July 2017. It is unnecessary to establish whether or not a physical return for completion was also sent at the relevant time.18. There is no statutory definition of “reasonable excuse”; it is an objective test to be considered in the circumstances of the particular case. The test is what a reasonable and prudent taxpayer intending to comply with their tax obligations, in the position of the appellant, would have done in the same circumstances.19. The appellant submits that it has a reasonable excuse because the delay in filing was caused by the accountant being unable to access the online filing system as his authorisation had not been processed by HMRC and, once authorised, by problems in installing commercial software required to file the return online.20. The notice to file set the same filing deadline, 6 July 2017, for both paper and online filing. There was no requirement, therefore, to file the return online. There was also no requirement that the accountant submit the return – the appellant does not give any reason why the return could not have been prepared on paper by the accountant and then signed and submitted by the partnership directly.21. I note that the grounds of appeal include the information that the partnership’s accountant had downloaded a paper return for the 2016/17 year and had submitted that to HMRC on 6 October 2017. No reason is given as to why a paper return was not similarly downloaded and completed for the 2015/16 tax year.22. Although the correspondence notes that the return could not be filed until the UTR was issued, it is not disputed that the UTR was issued in March 2017 and was therefore available well before the filing deadline in July 2017.23. I consider that a reasonable prudent taxpayer, in these circumstances, would have submitted a paper return directly by the filing deadline. The appellant has therefore not established that it has a reasonable excuse for the delay in filing the partnership return for the 2015/16 tax year and so each relevant partner is liable to the late filing penalty of £100. Decision24. The appeal is upheld in respect of the daily penalty of £170 but dismissed in respect of the late filing penalty of £100, such that the £100 late filing penalty is confirmed.25. 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. ANNE FAIRPO TRIBUNAL