HMRC have changed their view as to how they calculate penalties for error or mistake in a tax return. They have updated a number of compliance checks factsheets over recent weeks and this has lead to confusion as to what extent penalties will be reduced for the timing of a disclosure.
SME Tax News
In Welland v HMRC [2017] TC06265 the First Tier Tribunal (FTT) found that the taxpayer’s ignorance of the new rules for Non-Resident Capital Gains Tax (NRCGT) was not a reasonable excuse for the late filing of his NRCGT returns. The penalties were upheld, but special relief was granted.
In Barker v Baxendale Walker Solicitors (a firm) & Ors [2017] EWCA Civ 2056 the Court of Appeal found that the solicitors advising on an EBT structure were negligent in not warning their clients that the scheme could fail.
In Hesketh v HMRC [2017] TC06266 the First Tier Tribunal (FTT) found that the taxpayer’s ignorance of the new rules for Non-Resident Capital Gains Tax (NRCGT) was not a reasonable excuse for the late filing of their NRCGT returns and upheld the penalties. This contrasts with the opposite decision in the Rachel McGreevy case.
In Patrick Cannon v HMRC [2017] TC06254, the First-Tier Tribunal (FTT) quashed two of three penalties for a tax barrister, finding he had taken reasonable care despite misunderstanding the furnished holiday let rules.
Hello
This time we are having a closer look at late filing penalties. We also have new guides on the disguised remuneration loan charge.
HMRC has published a response to its consultation, ‘Scope of VAT Grouping’, looking at whether changes should be made to the rules on forming a VAT group should be changed following European Court decisions.
In Johnston v HMRC [2017] TC06238, the First Tier Tribunal (FTT) held that no penalties were due as HMRC had sent the notice to file to the incorrect address.