Most people will not realise it, but last month was officially ETF Month. Regular TW readers will be aware that ETF has waged pretty much a one-man (-woman?) campaign against the burning injustice of NRCGT penalties, through one of our longest-running and most-viewed threads. (S)he gets an “A*” for effort.
One of the key problems with HMRC’s approach to the NRCGT penalties is its continuing failure to grasp what constitutes a “reasonable excuse” when taxpayers, etc., fail to file an NRCGT return within the statutory timeframe. We have taken issue with HMRC’s approach to “reasonable excuse” for years. It is difficult to credit that, 4 years after the tribunal judge destroyed HMRC’s approach in Perrin v Revenue & Customs  UKFTT 488 (TC), we are still having to put up with this garbage. In fact, HMRC grasp of reasonable excuse has been so bad, and for so long, that it is impossible for me to conclude other than that it is deliberate. While the taxpayer also lost at the Upper Tribunal in Perrin v Revenue & Customs  UKUT 0156 (TCC), the Upper Tribunal did not disturb the lower court’s finding: the taxpayer did have a reasonable excuse, but had simply failed to remedy her mistake within a reasonable timeframe. In fact, the Upper Tribunal said:
“In an appropriate case where HMRC base their argument on [their] unsustainable position, the FTT may well consider it appropriate to exercise their jurisdiction to award costs against HMRC for unreasonable conduct of the appeal.”
Writing for the ICPA, Mark McLaughlin has remarked that HMRC recently removed some of its misleading guidance on reasonable excuse at CH61540. That removal preceded the UTT hearing by a couple of months, although the sentiment expressed by the Upper Tribunal is hardly novel.
If at First You Don’t Succeed…
This month is Contractor Month. We have another excellent contribution by ContractorCalculator that points to HMRC’s claims regarding IR35 being, literally, incredible. Here again, recent case law is showing HMRC’s approach to be indefensible. Jensal Software Limited v HMRC (2017) TC 00667 is the second case that HMRC has taken against this particular taxpayer – and the second case that it has lost. Just as with Perrin four years ago, last words to the Tribunal judge:
“HMRC have breached Article 9 of the Taxpayer’s Charter in their handling of the enquiries. The Appellant’s complaint was upheld by HMRC in relation to its extension of the enquiry and the distress caused to the Appellant. HMRC have not acted impartially, for instance by seeking information from the DWP in the HMRC Questionnaire; the job of HMRC is to check if the correct amount of tax has been paid not to only seek evidence to support its own case.”