Rightful penalty

A company was ten months late in filing its subcontractors' PAYE return. HMRC issued penalties under TMA 1970 s 98A(2)(a) for failure to submit the return by the due date.

Section 98A(3)(a) provides that where the number of persons in respect of whom details should be included in the return is 50 or less the penalty is £100 a month.

The appellant claimed that banding the penalty was unfair and that he paid the same amount with his one subcontractor as someone who engaged 49.

Therefore the penalty was disproportionate and infringed its right to a peaceful enjoyment of its possessions (Human Rights Act 1998 Sch 1 Part II article 1).

There was no disputing the fact that the imposition of a penalty for not submitting returns was a legitimate interference with a taxpayer's rights under HRA. But it was the banding that the taxpayer...