HMRC To Appeal Tribunal Penalty Ruling
HMRC is to challenge a tribunal ruling that criticised it’s penalty practice of allowing fines to accumulate before issuing penalty notices.
The taxpayer (claimant) in the original decision, Hok Ltd did not submit it’s PAYE employers annual return by the May deadline.
The company’s one employee ceased employment during the year and Hok was unaware a return still needed to be filed.
HM Revenue & Customs failed to send out any the penalty notices until October, which allowed the penalties to accumulate and increase substantially.
Tribunal Ruling in Favour of Taxpayer (Hok Ltd)
Geraint Jones QC the Tribunal Judge (Chairman) in this case ruled that Hok was only liable to pay the £100 original fine.
The Tribunal Chairman also strongly criticised HMRC for failing to act in good conscience.
“In our judgement there is nothing fair or reasonable in setting a computer system so that it does not generate a penalty notice until four months have gone by from the date of default.” the Judge said.
“We are in no doubt that the computer system could easily be set to generate a single £100 penalty notice immediately after the 19 May in each year. That is the course that a fair organ of the state, acting in good conscience towards the citizens of the state, would adopt.” the judgement added.
HMRC’s decision to challenge the rulings would result in a binding decision in the Court of Appeal that could lead to HMRC changing its processes if it was unsuccessful.
HMRC not “acting in good conscience towards the citizens of the state” surely not?
I see that sort of behaviour from HMRC…. MOST DAYS !
Dear Geraint Jones QC, why do you think HMRC are happy to take six weeks or more to issue UTR references to new self assessment cases in December and January? Becuase they hope to extract more penalties from taxpayers?
There are so many penalties, often substantial amounts of money, enough to liquidated a lot of small businesses. The penalty system is a cover up frankly of HMRC total inability to do anything? So they pass the buck completely over to the taxpayer, every single time.
The problem with the tax system now is that those trying to comply and in this very complex hard to comply with tax system get hammered for the slightest mistakes.
But what effort is HMRC actually making to collect tax from the black market and people evading the tax system? VERY little by comparision as that would actually require that HMRC did some hard work.
Often when I call to speak to Inspectors at HMRC they have often left the office for the day by around 3.30 or 4pm? I have called to find Inspectors still out at lunch at 3pm on more than one occasion in the last year.
The tactic is to tackle the easy targets and not actually do any hard graft.
I have seen numberous tax enquires gone of for two years or more over very small amounts of money as HMRC pursue small businesses they think won’t or cannot afford to fight back and will just cave in and pay up. Very often I seen HMRC walk away with nothing or very little for the time and costs involved.
Why is that?
Firstly Inspectors have far to much power, not enough accountabilty, and are oftern very poorly supervised by Managers looking for bonuses and promotions. Many try to make the rules up as they go along and bully taxpayers.
Secondly, Inspectors are driven by targets in order to get promotions, payrises and bonus payments. (I have made a Freedom of Information Act request to substantiate this) so it is fact.
Thirdly, the complaints system within HMRC is very weak. In tax enquiry cases particularly (which are often the worst cases) complaints officers often say they cannot get involved as Tribunal (which is very expensive) is the route for taxpayers to appeal.