TAX CASES - 19.10.2022

Delay in response means reasonable excuse

Watt v HMRC. Ms Watt (W) filed online for the first time in 2019/20, but did not press the “submit” button. She had paid the tax calculated on time. She received a £100 penalty, prompting her to check her tax account, which stated she had paid the correct amount of tax. She appealed against the penalty. HMRC did not reply for nearly five months, by which time the penalties had accumulated to £1,300.

Law. A penalty can be set aside if the taxpayer has a reasonable excuse.

Decision. The appeal was allowed. It had been reasonable for W to believe her return was submitted until she eventually received the reply to her appeal, whereupon she promptly rectified the error.