Tribunal: P35 12 months late

I am assisting a client whose former accountant filed a P35 late, triggering a £1200 penalty.

It appears that the former accountant opened all the post and didn't make the client aware of the late notices and penalties, and neglected to file the return for over a year. The client thought everything was fine until he finally switched accountants and then another letter asking for payment of the penalty arrived, which was the first he heard of it - over a year after the first penalty notice arrived. The previous accountant left a huge mess in every aspect of this client's affairs.

I have submitted an appeal, which is of course out of time, and so have taken it to tribunal. HMRC have responded saying they do not think the failures of the previous accountant are a reasonable excuse, as they wrote to the client many times, and it is the employers responsibility to ensure things are filed. While this is true, the client had every reason to believe that his affairs were in order, as he appointed a qualified accountant who assured him everything was in hand, and he had no evidence of the contrary until much later. Clients are not expected to check up on their accountant's every move; there is a level of implied trust that applies when an advisor is appointed. I have already quoted the case where the commissioner stated in a direct tax context, reliance on an advisor can constitute reasonable excuse (I forget the name offhand but did quote it in the appeal).

The previous accountant has phoenixed his limited company, so the client cannot seek any recompense from there. I am informed the is no PII recompense either - they have refused cover in this instance. So the client is faced with either getting the penalty reduced to nil, or paying up.

Can anyone think of anything else that might assist in this case? It really is not fair that the client have to suffer this penalty, and I believe the excuse is very reasonable under the circumstances.

Thank you.