Disappointing approach from HMRC
The First-tier Tribunal heard an appeal against HMRC’s decision to refuse a taxpayer’s claim to special relief, ie, a cancellation of a tax charge due to special circumstances.
The taxpayer had been issued with tax returns but did not file them so HMRC issued determinations of liability for all years. Returns were submitted but late. The taxpayer’s wife had dealt with his tax affairs until they were separated, he was dyslexic and was reported to have the intellectual capacity of a primary school child. There had been a fire at his house causing papers to be destroyed and his having to move out for a year. The taxpayer had tried to resolve matters, firstly by sending HMRC a letter, handwritten by his daughter, but this was returned as it had not been sent to the right department and, secondly by attending an HMRC office in person three times, but here he only obtained limited assistance. HMRC’s records showed that his income was less than his tax allowances for each of the relevant years, but refused the appellant’s claim for special relief – hence the appeal. The taxpayer’s representatives argued that it would be unconscionable for the Commissioners to seek to recover the tax, whereas HMRC submitted that the conditions were not satisfied: the appellant could have submitted tax returns to replace the determinations; he could have sought help; and that he had managed to ‘function’ in other respects.
The FTT found that it was unconscionable for HMRC to pursue recovery of the tax at stake given that the taxpayer was dyslexic, had general learning difficulties, relied on other family members in the absence of his wife, and relevant notifications from HMRC had probably been destroyed by his fire.
Date: 20th July, 2015
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