This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

NRCGT return

LSH
Posts: 25
Joined: Mon Nov 06, 2017 5:11 pm

Re: NRCGT return

Postby LSH » Wed Jun 06, 2018 5:22 pm

If conveyencers even just told their non-resident clients these returns were due (never mind take a suggested withholding tax) then I believe that the vast majority of us wouldn't have been in this situation in the first place.

The point is that there was virtually no information published on this prior to the law coming out (my place was under offer already the month before the law came into place and I certainly saw nothing about it at that point) and little has been published since since then. So conveyencers were just as blind as most non-residents.

Unless I misunderstood you, you seem to be insinuating in your post that people have been non-compliant out of choice then (in that the returns would have been filed, and non-residents would have complied if their pocket stood to lose out with a 10% deduction at source). Really? And in the meantime allow all the massive penalties to grow (as initially there were the daily penalties too)?

If that is what you meant - I couldn't be further away from you in my thinking. I genuinely believe that the vast majority of people (myself included) were sadly unaware, given the distinct lack of readily available information on it. I found nothing whatsoever on it in Feb before the April law change when my place went on the market.

etf
Posts: 607
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Thu Jun 07, 2018 8:44 am

bd6759, you are a valuable resource to this forum both for your undoubted knowledge of tax legislation which we can all learn from and for stating a contrary point of view so at least we can debate this area. This contrasts with the deafening silence from HMRC despite the various decisions at tribunal.

You are correct that the concept of reasonable excuse/tax tribunals (other than for my exam training) is a new one for me. I have lived in a bubble where I file tax returns on time. Where the odd return that has been filed late the resulting penalties have not been challenged because they are usually attributable to inaction by a client. That was the situation for the first 31 years of my tax career. I do recall my local branch ran a mocked up tribunal a decade or so ago which I did not attend because it did not seem relevant to the work I was involved with. With hindsight that was an error.

I have to say, I wonder if tax legislation ordered you to jump of a cliff, whether you would follow that instruction. Sometimes common sense has to come into play. Yes the legislation is poor, but equally HMRC's behaviour as detailed in my earlier charge sheet is just so random and contrary to the Taxpayers Charter. I have asked HMRC on numerous occasions for a contact who is responsible for ensuring HMRC follow the Charter, but to date I am still none the wiser. Does that person exist or is the Charter meaningless froth? I know this area interested the late Chris Jones and presumably he had an HMRC contact who is steadfastly trying to avoid me.

PS I did flag the reliance on an adviser excuse which featured in the last tribunal case and so don't accept your E- rating of my reasonable excuse knowledge (albeit the original steer came from a third party).

etf
Posts: 607
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Thu Jun 07, 2018 11:18 am

And just to support my Taxpayers Charter theory:

HMRC's standpoint

We don't accept ignorance as a reasonable excuse but we will treat all taxpayers even handedly.

The Evidence

I have successfully appealed against a NRCGT penalty. The wording of my letter was as follows and it was accepted without question:

"Further to your email of 17 June 2016, we write to appeal against the penalty of £800 issued to our client for the late submission of the non-resident capital gains tax return.

The circumstances are as follows:-

Our client has been living in Australia since 2012, during which time he rented out his property. The income has been declared on my client’s income tax return each year.

Due to my client’s absence from the UK, he was unaware of the new rules that came into force on 6 April 2015, requiring the CGT return to be completed within 30 days of the date of sale of the property. Hence, no CGT return was completed when the property was sold in November 2015.

When it came to our attention, the non-resident CGT return was filed without delay. You will see from the return that there is no tax due and therefore there has been no loss to HMRC. Both we and our client apologise for the delay in filing the return but are confident that you will be able to see that it was not a deliberate action.

We trust that, in the circumstances, the penalty can be removed.

In the meantime, our client has paid the amount due and so, if our appeal is successful, we should be grateful if this amount could be refunded as soon as possible."


Is there any logic here? To follow the Taxpayers Charter and treat taxpayers even handedly, outcomes of cases where the facts are the same must reach the same outcome. Are HMRC unwilling to record/publish the reason why 778 appeals were successful because there are plenty of other cases such as that described above?

Lambs
Posts: 1420
Joined: Wed Aug 06, 2008 3:15 pm

Re: NRCGT return

Postby Lambs » Thu Jun 07, 2018 11:27 am

B,

With regard to some of the comments made recently:

If E doesn't understand reasonable excuse, then he's far from alone. Show me ANYONE from HMRC who says they understand the concept of reasonable excuse and I'll show you a liar, a fool, or quite possibly both. Many, many tribunals have spent more time explaining to HMRC why they have failed to apply RE correctly, than they do rendering a judgment. Clearly, HMRC applies a different approach to different returns - and often the same type of return - all the time - and that is kind of E's point: a frankly risible lack of consistency.

People are regularly penalised for failing to account for tax where they didn't know they had an obligation to do so. That is also one of E's points. The fact that TENANTS are not so obliged under the NRL regime is simply reflective of a better, more reasonably crafted regime, created by a better, more reasonable tax authority.

The really concerning thing about some of these judgments is that they represent a tiny minority of cases. The vast majority will in all likelihood have been treated unfairly and poorly by the UK tax authority, safe in the knowledge that they are unlikely to be strongly represented because they are not usually UK nationals.

It seems eminently reasonable to me to infer that the ONLY reason for creating a regime which, as one of its greatest triumphs, requires a party to waste time notifying the UK authorities about something that they will be accounting for anyway, in due course through Self Assessment, is to generate revenue from penalties, from people who are innocent of a change in UK rules that was heralded on Twitter. A policy that HMRC is perfectly happy to take to tribunal to defend, even when it keeps losing (a bit like reasonable excuse). Which in turn tells you what you everything you need to know about the state and disposition of the UK tax authority in the 21st Century.


Regards all,

Lambs

bd6759
Posts: 3106
Joined: Sat Feb 01, 2014 3:26 pm

Re: NRCGT return

Postby bd6759 » Thu Jun 07, 2018 5:15 pm

The penalty regime stems from sch55.

We should all read and learn from Perrin v HMRC. This is a decision of the Upper Tier and released last month. The UTT sets out clearly the tests that need applied to determine a reasonable excuse. They even have a justifiable pop at HMRC for regurgitating their "unexpected or unusual event" mantra.

Unfortunately Perrin lost. However, if HMRC apply the guidance that is set out for the lower Tribunal to follow (and being an UTT case they are bound by it), we should get more consistent decisions.

https://assets.publishing.service.gov.uk/media/5af9caf440f0b622d18b2e86/Christine_Perrin_v_HMRC.pdf

As regards the NRCGT regime, I have said that adding another return will have no effect on the defaulters. If they were not going to report the gain in a self assessment, they are not going to report it in a NRCGT return. Adding another return does not solve the issue.

Lambs
Posts: 1420
Joined: Wed Aug 06, 2008 3:15 pm

Re: NRCGT return

Postby Lambs » Thu Jun 07, 2018 10:01 pm

B,

Thank you for reminding me of the origin of the NRCGT penalty regime. Surprisingly, I am quite familiar with the Perrin case. At FTT, it is one of the very cases to which I alluded in my previous post: exasperation with HMRC oozed from every stroke of Ms Redston's pen. You will note that the UT echoes that position, and suggests that it is about time that the FTT starts making HMRC pay for its contempt for the legislation and the courts. The UT has hit the nail on the head: HMRC is no longer concerned with doing what is right, but only with generating revenue, so it is only by making such odious cases too expensive to pursue that HMRC can be forced actually to comply with the law. You might think that I am being unfair to HMRC. But what else can you infer from its decision to drop Simple Assessment, the second it finds out that greater accuracy in assessments results in a **reduction** in tax take to the Exchequer? If the executive had a shred of integrity left, it would cleave to accuracy in taxpayers' affairs, and tax take be damned. That is what you get for telling HMRC its future lies in adopting a business mentality, and treating taxpayers like customers. A civil service aims (one hopes) to do right by the citizens it was created to serve, while a business aims to maximise revenue while minimising costs - anything else is window-dressing.

Regards all,

Lambs

etf
Posts: 607
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Thu Jun 14, 2018 11:34 am

Another NRCGT tribunal case-this one in favour of HMRC.

http://financeandtax.decisions.tribunals.gov.uk//Aspx/view.aspx?id=10473

I live in hope that one of these Tribunals will really challenge HMRC and ask for a breakdown of the reason why 778 appeals were permitted. It would show whether HMRC does treat taxpayers even handedly (evidence suggests they don't) and make things transparent which is how it should be. Whilst HMRC refuse to compile and release this data (surely their auditors should insist upon this in any event?) I will continue to hold my nose.

rbk123
Posts: 22
Joined: Tue May 30, 2017 1:27 am

Re: NRCGT return

Postby rbk123 » Tue Jun 19, 2018 12:33 am

We have received this morning, by e-mail, confirmation that the First Tier Tribunal Judge has upheld, in full, our appeals against Late Filing Penalties imposed by HMRC; common sense has prevailed at last! 20 months after the fines were imposed and many hours, on our part, preparing our case at each level of appeal. The case was heard on 11 June by Judge Charles Hillier. The sense of relief is amazing! For those of you going through the process, do not give up hope!

As soon as we receive the full transcript with the case reference, we will post it here for your reference.

rbk123
Posts: 22
Joined: Tue May 30, 2017 1:27 am

Re: NRCGT return

Postby rbk123 » Tue Jun 19, 2018 1:00 am

We're off out for lunch to celebrate. ............

LSH
Posts: 25
Joined: Mon Nov 06, 2017 5:11 pm

Re: NRCGT return

Postby LSH » Tue Jun 19, 2018 8:44 am

RBK - I am SO Happy for you.

I've been quiet but will post more when I finally hear anything sensible and meaningful with regards to where my case currently stands. (It's been a debacle of letters going missing etc etc; but thankfully my MP is now also involved so let's wait and see). Long story short is that they rejected my appeal from November (though I only heard about that officially last week - the letter went on a magical mystery tour) and I have applied for a review (even though that is apparently over 5 months too late). I can only hope that if mine goes as far as the tribunal like yours that I get someone sensible too. Go and enjoy the breath of relief!


Return to “Capital Gains Tax, CGT”