Penalty confusion

The taxpayer was late filing her 2011/12 employer return. HMRC imposed penalties of £1 200 which they mitigated to £559 this being PAYE due on the return she submitted online on 1 July 2013.

The taxpayer did not realise the fines related to the late return and appealed on the basis she paid the tax on time. She claimed she had spoken to the Revenue several times and was not told that the sanctions were in respect of the return.

It was not until February 2014 that the taxpayer understood the basis of the penalties after the tax department wrote to explain its position.

The First-tier Tribunal found that the charges to October 2012 were correct and the taxpayer had no reasonable excuse for late filing – but HMRC had contributed for the remainder of the default period to the taxpayer’s “continuing misapprehension that the penalties related...