Covid-19 was not a special circumstance to reduce RTI penalties

The taxpayer appealed against penalties for failing to file PAYE real time information (RTI) returns on time for the periods ending 5 June 2019 5 August 2019 5 September 2019 and 5 October 2019 (FA 2009 Sch 55 para 6C).

It accepted the penalties were due but requested a special reduction because the company was not operating and in negative cashflow because of the Covid-19 lockdown. HMRC refused so the taxpayer appealed.

The First-tier Tribunal said the taxpayer had conceded it did not have a reasonable excuse for the late returns. Special circumstances were undefined but specifically excluded inability to pay. The judge agreed with HMRC that consideration of a special reduction could apply only to the circumstances of the time of the failures. Indeed HMRC’s review letter was dated a few days before the lockdown so its decision could not have been expected to take account of...