TaxationWeb's Mark McLaughlin highlights two recent tax cases which prove HMRC can get things very wrong.
I was shocked and appalled this week to read a First-Tier Tribunal case where HMRC imposed a penalty for a late tax payment on a taxpayer who was suffering from cancer. HMRC had refused to accept that the taxpayer's late payment was attributable to her illness.
They argued (among other things) that the reason for the late payment was that some of the taxpayer's funds were tied up in an investment which didn't mature until after the due date for payment of the tax. The taxpayer contended that her illness was the main reason for the late payment; it was pointed out that she had developed a life threatening infection as a direct complication of intensive chemotherapy treatment, and was hospitalised in December/January 2011 (the due date for the tax was 31 January 2011).
The tribunal accepted that the taxpayer's illness constituted a reasonable excuse for the late payment of tax, and allowed her appeal (for the full transcript of the case, see Joanna Woolf v Revenue & Customs. Whilst I accept that HMRC are probably under pressure to maximise tax revenues, in my view HMRC's approach in some cases is unduly aggressive and totally unwarranted (for another example, see the recent case Newell & Anor (t/a Tanya's Takeaway) v Revenue & Customs, which was reported in the Mail Online'We were persecuted and made to fear we would lose everything': The tiny cafe the taxman said owed £500,000'
I openly invite HMRC to contact me to explain why they consider that its approach in taking cases such as the taxpayer suffering from an illness to the tribunal is justified
Best wishes,
Mark McLaughlin
Managing Editor
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