“(1) HMRC may give a notice (an ‘accelerated payment notice’) to a person (‘P’) if Conditions A to C are met. (2) Condition A is that – (a) a tax enquiry is in progress into a return or claim made by P in relation to a relevant tax, or (b) P has made a tax appeal (by notifying HMRC or otherwise) in relation to a relevant tax but that appeal has not yet been – (i) determined by the tribunal or court to which it is addressed, or (ii) abandoned or otherwise disposed of. (3) Condition B is that the return or claim or, as the case may be, appeal is made on the basis that a particular tax advantage (‘the asserted advantage’) results from particular arrangements (‘the chosen arrangements’). (4) Condition C is that one or more of the following requirements are met (a) … (b) the chosen arrangements are DOTAS arrangements; … (5) ‘DOTAS arrangements’ means – (a) notifiable arrangements to which HMRC has allocated a reference number under section 311 of FA 2004, …” (a) a tax enquiry is in progress into a return or claim made by P in relation to a relevant tax, or (b) P has made a tax appeal (by notifying HMRC or otherwise) in relation to a relevant tax but that appeal has not yet been – (i) determined by the tribunal or court to which it is addressed, or (ii) abandoned or otherwise disposed of. (a) … (b) the chosen arrangements are DOTAS arrangements; … (a) notifiable arrangements to which HMRC has allocated a reference number under section 311 of FA 2004, …”
“(1) This section applies where an accelerated payment notice has been given under section 219 (and not withdrawn). (2) P has 90 days beginning with the day that notice is given to send written representations to HMRC – (a) objecting to the notice on the grounds that Condition A, B or C in section 219 was not met, (b) objecting to the amount specified in the notice under … section 221(2)(b), … (3) HMRC must consider any representations made in accordance with subsection (2).
“(1) If P satisfies HMRC or (on appeal) the First-tier Tribunal or Upper Tribunal that there is a reasonable excuse for a failure to make a payment— (a) liability to a penalty under any paragraph of this Schedule does not arise in relation to that failure … (2) For the purposes of sub-paragraph (1)— (a) an insufficiency of funds is not a reasonable excuse unless attributable to events outside P’s control, (b) where P relies on any other person to do anything, that is not a reasonable excuse unless P took reasonable care to avoid the failure, and (c) where P had a reasonable excuse for the failure but the excuse has ceased, P is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.” (a) liability to a penalty under any paragraph of this Schedule does not arise in relation to that failure … (a) an insufficiency of funds is not a reasonable excuse unless attributable to events outside P’s control, (b) where P relies on any other person to do anything, that is not a reasonable excuse unless P took reasonable care to avoid the failure, and (c) where P had a reasonable excuse for the failure but the excuse has ceased, P is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.”
“Until we inform your legal representatives otherwise, HMRC will not enforce payment of the accelerated payment or of any associated penalties until the Court has dealt with your application for an interim relief order. However, the accelerated payment remains due by30 March 2017 and you will be liable to penalties if you do not pay in full and on time. This is consistent with the terms of the interim relief order for which you and other claimants have applied.”
“1. The Defendants shall not take steps to enforce any sum due and payable by the Claimant under its APNs or associated penalties until the High Court has refused permission to proceed or, if permission to proceed is given, has given judgment on the claim. 2. Nothing in paragraph 1 shall affect the Defendants’ entitlement to: 2.1 issue further APNs to the Claimant 2.2 determine any written representations by the Claimant in respect of any APN it has received (including any further APN) 2.3 issue any notice of penalty to the Claimant in respect of its failure to pay the accelerated payment required of it by any APN (including any further APN).” 2.1 issue further APNs to the Claimant 2.2 determine any written representations by the Claimant in respect of any APN it has received (including any further APN) 2.3 issue any notice of penalty to the Claimant in respect of its failure to pay the accelerated payment required of it by any APN (including any further APN).”
“… the practical importance of the section 222 procedure should encourage the court to adopt a broad and non-technical approach to the permitted grounds of objection, with the object of ensuring as far as reasonably possible that all objections relating to the applicability of Conditions A, B or C, or to the amount of the understated tax, should be capable of resolution under the section.”
“… a duty to give serious and careful consideration to the representations which are made, supplemented if necessary by HMRC’s acknowledged duty to deal in good faith with proper representations made to them by taxpayers, whether or not falling strictly within the scope of the APN.”
“we consider that the statutory scheme concerning PPNs and penalty notices does by necessary implication exclude the possibility of a challenge by the taxpayer to a PPN on public law grounds in the context of an appeal to the FTT against a penalty notice. This is for two reasons. The first is the fact that Parliament has provided rights of appeal against the underlying tax assessment and against a penalty notice, but not against a PPN. In the case of a PPN, Parliament has only provided a right to make representations (within a specified time limit) which HMRC are required to consider. In our view, the absence of a right of appeal against PPNs is a clear indication that Parliament does not intend taxpayers to be able to challenge PPNs on appeal to the FTT. If taxpayers cannot do so directly, then it would be very odd to permit them to do so indirectly by way of an appeal against a penalty. The second reason, which reinforces the first, is that permitting such a challenge would be contrary to the design and purpose of the PPN regime …”
“In our judgment, the para 22(4) requirements are not similar to a reasonable excuse test but are instead entirely objective, for the following reasons: (1) The statutory provisions make no reference to the person acting ‘reasonably’, or having ‘a reasonable excuse’, so as to require a tribunal to consider his particular circumstances, such as his belief, experience, relevant attributes and his situation at the relevant time. (2) Para 22(4) is also followed by para 22(5), which provides two examples of ‘exceptional circumstances’: national or local emergencies such as war, civil unrest or natural disasters; and a sudden or life-threatening illness or injury. All these scenarios are objectively verifiable; they do not depend on the taxpayer’s reasonable belief. (3) Further support is provided by the government’s response to the consultation on the SRT, cited by the FTT at §128, which said (our emphasis) that the purpose of the new provisions was to ‘introduce a statutory definition of tax residence (statutory residence test) that is transparent, objective and simple to use’.” (1) The statutory provisions make no reference to the person acting ‘reasonably’, or having ‘a reasonable excuse’, so as to require a tribunal to consider his particular circumstances, such as his belief, experience, relevant attributes and his situation at the relevant time. (2) Para 22(4) is also followed by para 22(5), which provides two examples of ‘exceptional circumstances’: national or local emergencies such as war, civil unrest or natural disasters; and a sudden or life-threatening illness or injury. All these scenarios are objectively verifiable; they do not depend on the taxpayer’s reasonable belief. (3) Further support is provided by the government’s response to the consultation on the SRT, cited by the FTT at §128, which said (our emphasis) that the purpose of the new provisions was to ‘introduce a statutory definition of tax residence (statutory residence test) that is transparent, objective and simple to use’.”
“Whether or not the circumstances were ‘exceptional’ is a mixed question of fact and law. This Tribunal cannot interfere with the findings of fact made by the FTT unless there was no evidence to that effect. However, whether one or more findings of fact mean that the Taxpayer’s circumstances were ‘exceptional’ is a question of law.”
“43. In the present case, in deciding whether the appellant had a reasonable excuse for her failure to file her return on time, how long that reasonable excuse lasted, and whether she filed the return without unreasonable delay after that excuse came to an end, the FTT was carrying out its own value judgment, applying its understanding of the concepts of ‘reasonable excuse’ and ‘without unreasonable delay’ to the primary facts which it had found. 44. None of the relevant primary facts found by the FTT are disputed by the appellant. It is therefore clear … that the Upper Tribunal can only overturn the FTT’s decision if we are satisfied that the FTT was wrong in law to interpret the statutory phrases ‘reasonable excuse’ and ‘without unreasonable delay’ in the way it did, or if it plainly misapplied the correct law to the facts which it found.”
“(1) First, establish what facts the taxpayer asserts give rise to a reasonable excuse (this may include the belief, acts or omissions of the taxpayer or any other person, the taxpayer’s own experience or relevant attributes, the situation of the taxpayer at any relevant time and any other relevant facts). (2) Second, decide which of those facts are proven. (3) Third, decide whether, viewed objectively, those proven facts do indeed amount to an objectively reasonable excuse for the default and the time when that objectively reasonable excuse ceased. In doing so, [the Tribunal] should take into account the experience and other relevant attributes of the taxpayer and the situation in which the taxpayer found himself at the relevant time or times. It might assist the [Tribunal], in this context, to ask itself the question ‘was what the taxpayer did (or omitted to do or believed) objectively reasonable for this taxpayer in those circumstances?’ (4) Fourth, having decided when any reasonable excuse ceased, decide whether the taxpayer remedied the failure without unreasonable delay after that time … In doing so, the [Tribunal] should again the decide the matter objectively, but taking into account the experience and other relevant attributes of the taxpayer and the situation in which the taxpayer found himself at the relevant time or times.”
“210. We accept that Sheiling provides support for the view that a gross or obvious procedural error in an APN can provide the basis for a reasonable excuse defence. However, we agree with Mr Hall that a genuine belief in the success of a JR based on the failure by the Designated Officer to form a view on the effectiveness of the scheme is not [a] ‘gross or obvious’ error, but instead one which requires ‘detailed legal submissions’: this is evident from the Rowe litigation as well as from the length and complexity of the relevant parts of this Decision. 211. It therefore follows that a person’s belief that a JR would succeed because of the failure by the Designated Officer to form a view on the effectiveness of the scheme cannot form an objectively reasonable excuse for the purposes of an appeal against an APN penalty. That is sufficient to decide Issue Two in HMRC’s favour, but in case we are wrong in our analysis we have also considered Perrin.”
“213. It is clear from our findings of fact that, although Mr Jones genuinely believed that the JR would succeed, his belief was based on trust in the expertise of his advisers, and not on any understanding of the merits of the claim, see §109ff. It follows that Mr Jones had no knowledge of the Designated Officer ground, and did not rely on it. 214. The third stage of Perrin is to consider whether this uninformed faith in his advisers was reasonable for a person in Mr Jones’s position, and we find that it was not. He is an intelligent and experienced businessman, who regularly makes contracts with his suppliers. He was capable of understanding the PPS Scheme sufficiently to explain it to Menzies.”