Behaviour was not deliberate

The taxpayer was late filing her returns for 2010-11 and 2012-13. HMRC imposed late filing and payment penalties as well two for deliberate behaviour (£40 681 and £19 562).

There was no dispute that the returns were late but the taxpayer appealed against the penalties. In brief she said the failure to make returns was not deliberate. She was considerable pressure running a business and dealing with relatives’ illnesses. Further she left tax and financial matters to her husband and their accountant and signed documents when requested.

The First-tier Tribunal considered first the deliberate penalties. The judges said for deliberate behaviour to occur there had to be a ‘conscious act’ on the part of the individual to behave in that way. When the taxpayer tried to deal with tax matters she took action for example setting up a time-to-pay arrangement for a debt from 2011. When...