A trend I have noticed in recent First-tier Tribunal decisions in penalty cases is the surprising difficulty that is faced by the tribunal in obtaining documentary evidence from HMRC.

The Revenue will print a systems note that, say, a reminder has been issued, but there will be no copy of it. Thus, the tribunal has to decide whether to rely on the department’s internal systems note.

I have no reason to doubt those systems notes are, in the main, an accurate record of what happened, but it is not satisfactory to have to rely on such indirect evidence.

I suspect this issue was not thought through properly when the systems were designed. I hope the same problems will be designed out of the new digital environment.

There is perhaps something to be said for carbon paper after all.

Pride and comfort

Read the decision in CJS Eastern Ltd (TC4044). Three things in this case have lessons for us all:

1. People easily get themselves in a mess by not understanding things. Is your advice always clear, or do you expect your clients to fill in the gaps in their understanding?
    
2. The penalty system works in an odd way: we must ensure the outcome of the current review of penalties is a system that is rational and fair to all parties.
    
3. We should take pride in the way the tax tribunals make the effort to explain matters to taxpayers who are caught up in problems that they do not understand. Although the outcome is often a disappointment to those individuals, they should derive comfort from the fact they had a fair hearing and an opportunity to air their issues.

There are plenty of things in our tax system that do not work. Let’s acknowledge one area which, in my view, works very well.

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