The Sunday Times says, “It’s time to take on the taxman”

Very interesting piece in the Money section of The Sunday Times today saying that the fines HMRC oh-so-casualy sends out are – increasingly – not standing up in court. The article by Ali Hussain says:

Taxpayers are forcing HM Revenue & Customs to back down over ‘unreasonable’ penalties for late payment of tax

Taxpayers are forcing HM Revenue & Customs to back down over “unreasonable” penalties for late payment of tax. The number who have successfully challenged fines for missing deadlines at tribunal rose nearly fourfold in the first six months of 2011 compared with the same period last year, said McGrigors, the law firm.

HMRC rules state fines will be waived only if taxpayers have a “reasonable excuse” and that this must be down to “exceptional circumstances”. However, judges are increasingly ruling that the Revenue’s interpretation of the law is too narrow and have overturned the fines in 14 cases so far this year.

The number of people challenging fines remains small but McGrigors is urging more taxpayers to take up their rights if they have been unfairly penalised.

For example, HMRC guidelines state postal delays can be considered a reasonable excuse only in the most “exceptional circumstances”. However, a recent tribunal ruled the Revenue had been wrong to impose a fine on a taxpayer even though his return arrived after the deadline because he had posted it four days before.

In another case, a fine was overturned after HMRC failed to send a taxpayer a paper return form on time. HMRC guidelines stipulate this would not constitute a reasonable excuse because the taxpayer could have filed online. However, the judge disagreed and overturned the fine.

Another taxpayer was fined for failing to file on time as he thought his accountant would do so for him. The tribunal over-ruled HMRC, saying a “genuine mistake” can constitute a “reasonable excuse”.

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For the full article click here – you will need to be a Sunday Times subscriber, but – hey – it’s only £1 a week for the Times and Sunday Times and if you’ve got an iPad, well the Sunday Times is just great.

Monday 25 July 2011: The Belfast Telegraph have followed up the ST article with, “Taxpayers urged to challenge over fines” you an read that here.