Fear of making a mistake is not a reasonable excuse

The taxpayer who was a solicitor submitted his 2014-15 tax return 27 months late. HMRC imposed late filing penalties and the taxpayer appealed.

He claimed he had a reasonable excuse – namely his mental health had suffered as a result of dealing with HMRC previously. In essence he said he had a debilitating fear that ‘even the slightest error on the return could be used to bring criminal proceedings against him’. As a result he did not want to file his return until he was certain it would be correct with no risk of prosecution.

The taxpayer was the subject of an investigation into his non-domiciled status. He had attended an interview under caution but HMRC had subsequently decided not to pursue the criminal investigation and instead began a civil investigation which is still under way.

The First-tier Tribunal said it had ‘considerable reservations’ about the reliability of...