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Where Taxpayers and Advisers Meet

NRCGT return

etf
Posts: 621
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Tue Apr 16, 2019 3:13 pm

I have copied below HMRC's incredibly disappointing response to my follow-up questions copied below:

a) To be absolutely clear, is HMRC still contending it has treated all NRCGT appeal taxpayers even-handedly?
b) If the answer to the above question is positive, how many cases in the 3% period and the 79% period did you review to ensure this statement is correct and can you provide any insight into why so many more cases were successful in the 79% period than the 3% period?


There is little I can add to the earlier reply. We have explained that a customer will not pay a penalty if they have a reasonable excuse, what a reasonable excuse is, and how we consider claims. Each claim is considered on its own facts, taking into account the customer’s particular circumstances and abilities.

Once again HMRC have refused to confirm whether they believe NRCGT taxpayers charged penalties have been treated even-handedly and they have not commented on the massive 3% to 79% movement in successful appeals. If HMRC are confident that NRCGT taxpayers have been treated even-handedly, why can they not just come out and state it? (evidence contained in this thread..Goochiegate..suggests that such a statement would be problematic).

Previous letters from HMRC have been signed by individuals but this one has no individual signature block.Perhaps individuals are becoming nervous that they will be accused of attempting to mislead the public by continuing to ignore the available evidence.

etf
Posts: 621
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Wed May 01, 2019 3:52 pm

I stated in an earlier post that I thought the NRCGT appeal statistics for the quarter ended 31 March 2019 might make interesting reading. How right that thought has proved to be:

I can confirm HMRC hold information which falls within the scope of your request and this has been provided below:

i) 3,586 returns were filed in this period

ii) 977 of these returns that have been processed were late filings

iii) The number of appeals received in the 3 months ending 31/03/19 was 147. The percentage of reviewed appeals accepted was 97%.


So we have gone from a situation where 97% of NRCGT appeals failed to 97% succeeding in just a short period of time. As the rules have not changed, from the information available, I find it very difficult to accept that HMRC are dealing with taxpayers even-handedly (fairly) as they are required to do under the Taxpayers Charter.

bd6759 have I persuaded you to any extent that perhaps my theory has some merit? In failing to answer my direct question on more than one occasion are HMRC staff seeking to mislead the public?

bd6759
Posts: 3109
Joined: Sat Feb 01, 2014 3:26 pm

Re: NRCGT return

Postby bd6759 » Thu May 02, 2019 8:47 pm

I believe that the earth is round and that man has landed on the moon. I don't subscribe to conspiracy theories, and even if I did, I would not accept that this issue (and you) were important enough to cause a cover up.

Lambs
Posts: 1429
Joined: Wed Aug 06, 2008 3:15 pm

Re: NRCGT return

Postby Lambs » Thu May 02, 2019 9:15 pm

The truth is out there...

etf
Posts: 621
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Fri May 03, 2019 5:44 am

I believe that the earth is round and that man has landed on the moon.

Good, we have some common ground.
I don't subscribe to conspiracy theories, and even if I did, I would not accept that this issue (and you) were important enough to cause a cover up.

To be clear, are you stating it is not important for HMRC to treat taxpayers even-handedly (fairly)? If that is the case, to use your space theme, 'Houston, we have a problem'.

What is your take on a swing from 97% of NRCGT appeals failing to 97% succeeding/a four month period (Jan 19 to Apr 19) without a NRCGT tribunal case. Have HMRC thrown in the towel?

bd6759
Posts: 3109
Joined: Sat Feb 01, 2014 3:26 pm

Re: NRCGT return

Postby bd6759 » Sat May 04, 2019 9:20 am

Even-handedly does not mean “the same”.

We will agree that it was wrong for HMRC to announce a review of HICBC penalties. By doing so they have opened a can of worms and set a precedent that will bite them.

A review of NRCGT penalties would have been the obvious choice and could have been explained away as unique because of the specific circumstances.

Incompetence does not mean conspiracy.

etf
Posts: 621
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Tue May 07, 2019 1:52 pm

Thank you for your reply.

If HMRC have moved their own goal posts (as the Freedom of Information data suggests is probably true-quarterly successful appeals moving from 3% to 97%) and they do not apply the new treatment to taxpayers who have previously been penalised under the harsher regime, then those earlier taxpayers to my mind have not been treated fairly. The Taxpayers Charter states HMRC will treat taxpayers even-handedly (fairly).

If HMRC is confident that it has treated NRCGT appeal taxpayers fairly, why not confirm that point and actually answer my question?

We also have the Goochie case where nobody has been able to identify the magic ingredient in the accountant's appeal letter that lead to those penalties being cancelled. Goochie's circumstances must surely mirror the situation of many other people affected by these penalties who I believe have not received equitable treatment.

etf
Posts: 621
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Tue May 14, 2019 7:32 am

Peter Vaines' encouraging summary of the NRCGT tribunal case that took a long time time to be published on the Gov' website:

Non Resident Capital Gains Tax
It is possible that this unhappy episode could be coming to a conclusion.

It will be remembered that non residents must file a non-Residents Capital Gains Tax return within 30 days of completion of the sale of a UK residential property, even where there is a loss, and penalties have routinely been imposed by HMRC for failure to do so. This has given rise to a degree of dissatisfaction – and appeals to the Tribunal.

Some Tribunal judges have taken a firm view that being unaware of the requirement to submit a NRCGT return within the 30 days can (in appropriate circumstances) represent a reasonable excuse.

HMRC have argued that there can be no reasonable excuse because:

a) Non-residents have a duty to stay up to date with UK legislation.
b) Ignorance of the law is no excuse
c) The obligation to file the NRCGT return is neither obscure nor complex.

One judge rejected these arguments as “claptrap” and “preposterous” – even pointing to the fact that the judge himself had difficulty understanding the position. He also drew attention to the fact that HMRC explained the requirements incorrectly in their published materials, which rather supported the suggestion that the law must be obscure or complex if HMRC did not get it right themselves.

On the other hand, another group of Tribunal judges have taken the opposing view - that ignorance of the law was no excuse and that failure to abide by these statutory obligations inevitably gave rise to a penalty.

There has been another case Kirsopp v HMRC [2019] UKFTT 0217 (TC) which might be thought to be just another one in the growing catalogue of conflicting decisions … but perhaps not. This case might just bring the debate to a close.

The distinguished Upper Tribunal Judge Charles Hellier (sitting in the FTT for this case) explained that there was a divergence of opinion among FTT Judges on the matter. However, he drew attention to the decision of the Upper Tribunal in Perrin v Revenue & Customs [2014] UKFTT 488 (TC) which held that it was a matter for the judgment of the FTT in each case whether it was objectively reasonable for the particular taxpayer to have been ignorant of the requirements in question.

Judge Hellier specifically rejected HMRC’s argument that a taxpayer has an obligation to keep up to date with the law. He held that there is no such obligation. A penalty may arise from an inexcusable breach of the law, but not from the failure to keep up to date.

In the circumstances of Mr and Mrs Kirsopp, Judge Hellier concluded that they had displayed a reasonable regard to complying with their tax obligations and remedied their failure within a reasonable time after they discovered the true position. They therefore had a reasonable excuse.

I would respectfully suggest that this must be right. It surely cannot be reasonable for HMRC to suggest that non-resident individuals have a duty to keep up to date with all aspects of UK tax legislation which could possibly affect them; and must regularly read all HMRC publications and be completely familiar with the HMRC website. It would follow from this reasoning that everybody in the world must have this duty. And there is no reason why this obligation not extend to all UK legislation – not just tax.

Can you imagine what the Chairman of HMRC would say if he went to Sweden and was immediately fined a large sum of money by the authorities there. Why have I been fined? Because you have contravened one of our rules. You have a duty to be up to date with Swedish law (and with all the materials published by the government – all in Swedish). So pay up. But that is just silly, he would say.

Well, yes.

etf
Posts: 621
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Thu Jul 25, 2019 3:48 pm

We are now nearly 7 months into 2019 and if my understanding is correct, no new NRCGT late filing tribunal cases have been published on the Gov' website. Given the deluge of cases published in the preceding calendar years, is this not a surprising fact as HMRC are supposed to deal with taxpayers even-handedly (fairly)?

As Lambs previously stated, "the truth is out there", but does Sir Jon want to find it before his departure? Will he do the right thing or are parts of the Taxpayers Charter just meaningless guff (in my opinion).

etf
Posts: 621
Joined: Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Fri Aug 16, 2019 3:42 pm

The astonishing turn around from 97% of NRCGT penalty appeals losing to 97% and now 96% winning continues:

Thank you for your request, which was received on 17 July 2019, for the following
information:
i) How many NRCGT returns were filed in the 3 months ending 30 June 2019;
and
ii) How many of the above returns were late filings; and
iii) The number of appeals received and the percentage of reviewed appeals
accepted.

I can confirm HMRC hold information which falls within the scope of your request and this
has been provided below:
i) 3,682 returns were filed in this period
ii) 406 of these returns that have been processed were late filings
iii) The number of appeals received in the 3 months ending 30/06/19 was 34.
The percentage of reviewed appeals accepted was 96%.


HMRC must love the NRCGT penalty system as they do not have to prove they have issued a return notice to the taxpayer-see Croner summary below....these Welsh sounding judges are a thorn in the side of HMRC (surely not another cricketer turned judge e.g. Popplewell?).

HMRC alleged to have sent Mr Hutchings (the appellant) late filing penalty notices in respect of his 2016–17 tax return.
As the appeal was in respect of penalties, the FTT noted that the European Convention on Human Rights, art. 6 (right to a fair trial) applied. This included that:

because the appeal involved penalties, HMRC bore the onus of proving the facts and matters justifying the imposition of penalties; and

the tribunal had to make its findings of fact based upon admissible evidence; not on unsubstantiated assertions made by HMRC.
As the appellant had not admitted receiving a notice to file it was for HMRC to prove the prerequisite fact that a notice to file had been served as required by TMA 1970, s. 8. The only evidence HMRC supplied was a document headed ‘Return Summary’ which bore the appellantʼs name, tax reference number and National Insurance number. There was then a column which contained the words ‘Return Issued Date’ alongside which appeared ‘06/04/17’. HMRC inferred that the FTT could be satisfied that a notice to file was sent to the appellantʼs correct address.
Judge Geraint Jones QC decided that the ‘Return Summary’ fell well short of being sufficient evidence to prove that a notice to file was actually sent to the appellant. That was because:
(1)
The ‘Return Issue Date’ of 6/04/17 was probably incorrect because that would have been the date on almost every personʼs Return Summary even though the notices would have been sent out on a staggered basis.
(2)
There was no evidence to show that a notice to file was actually sent.
(3)
HMRC had not provided any evidence of how they operated their systems for the dispatch of such material.
Therefore, HMRC had failed to prove a prerequisite to issuing the penalties in dispute and accordingly the FTT allowed the appeal.


Return to “Capital Gains Tax, CGT”

cron