Penalties
Reliance on accountant not a reasonable excuse
The First-tier Tribunal (FTT) found that while the taxpayer had initially taken sufficient steps to file his tax returns, he should have made more enquiries when penalty notices began to arrive.
HMRC issued penalties for the late filing of four tax returns. No tax was due for any of the years. When the taxpayer moved to the UK he registered for self-assessment and instructed an accountant. He submitted his tax return information to his accountant in good time and signed each tax return produced on the assumption that his accountant would then submit it. His accountant did not and has since died so no evidence was given as to the circumstances. There were questions as to how aware the taxpayer was of the penalties, which began to be issued in 2012. He was given permission to appeal late.
The FTT upheld all but one of the penalties. The returns were very late, and the taxpayer should have checked that they had been submitted. It was reasonable for him to rely on his accountant, but only until penalty notices started to be sent to him. Therefore, the first penalty was cancelled, but subsequent ones upheld.
Wals v HMRC [2025] UKFTT 1331 (TC)
From Tax Update November 2025, published by S&W Partners LLP
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