Postby etf » Tue Aug 21, 2018 10:46 am
I liked the following summary in the Smith case. A reasonable/reasoned approach unlike the analysis of some other judges who live in a world of unreasonable perfection:
Turning then to the application of the above test in the context of the facts in
this appeal, my view is that the Appellant’s failure to file the NRCGT return before he
did so was reasonable, given the circumstances of this case. This is, first, because
there was no reason for the Appellant to have suspected that, in addition to reporting
5 the disposal in his normal self-assessment return in respect of the relevant tax year of
assessment, he would also need to make another, separate and self-standing, tax return
in relation to the disposal. And, therefore, there was no reason why the Appellant
should have gone onto the Respondents’ website to look for the existence of any such
additional filing obligation. Moreover, there was no reason why the Appellant should
10 have sought the advice of a tax expert in relation to the disposal, given that it was
obvious to him from the numbers involved that the disposal had not given rise to a
chargeable gain and so he would be able to deal with the disposal perfectly adequately
in his self-assessment return without recourse to expert advice. For those two reasons,
I believe that a hypothetical responsible person, who was cognizant of his obligations
15 in relation to tax and intended to comply with those obligations, might very well have
acted in the same way as the Appellant.
For me, however, the additional analysis copied below is flawed overlooking the Government's own thoughts in this area flagged by LSH/Someone in this thread.
. For completeness in relation to the reasonable excuse issue, I should add that,
although Section 118(2) TMA 1970 does not contain the language which appears in
paragraph 23 of Schedule 55, to the effect that reliance on a third party can be a
reasonable excuse for a taxpayer only if the taxpayer took reasonable care to avoid the
5 failure, I believe that the two provisions should be applied in exactly the same way in
that regard. In other words, I would apply Section 118(2) TMA 1970 on the basis
that, unless the taxpayer in question took reasonable care to avoid the failure in
question, his or her reliance on the third party would not amount to a reasonable
excuse.
10 45. And, in this case, were it not for my conclusion that the Appellant’s ignorance
of the obligation to file the relevant return amounts to a reasonable excuse in and of
itself, I would not have been inclined to conclude that the Appellant’s reliance on his
conveyancing solicitor to inform him of the relevant obligation met the standard of
reasonable care. This is because, whilst the fact that the Appellant’s conveyancing
15 solicitor appears not to have been aware of the new filing obligation tends to support
the proposition that insufficient publicity was given to the obligation – after all, one
would expect a conveyancing solicitor to be aware in general terms of the tax
obligations associated with conveyancing – I do not myself consider that a taxpayer
who relies on a conveyancing solicitor to apprise him of, or to fulfil his
20 responsibilities under, the tax legislation has a reasonable excuse simply by virtue of
that reliance. Tax legislation is complex and is for that reason generally the subject of
specialist advice. So, if the solicitor in question had been a tax specialist, then the
Appellant’s reliance argument would have had more substance. As it is, I do not
think that the Appellant’s reliance on his conveyancing solicitor to point out a new
25 tax-related filing obligation is, in and of itself, a reasonable excuse. However, I do
think that, nevertheless, for the reasons set out above, the Appellant had a reasonable
excuse for his failure to be aware of the filing obligation until shortly before he filed
the NRCGT return