A homeless man who filed his tax return late had a reasonable excuse for the late filing and his appeal against late filing penalties was allowed.
The appellant was a self-employed electrician. Until April 2014, he shared a house in London and was in work. In April 2014, the appellant travelled to Poland. Following his return to the UK, he lost his job and exhausted all his savings. He was evicted from his house and all his belongings were thrown onto the street, where they were lost or stolen. All his documents were also either lost or stolen.
The appellant eventually ended up sleeping on the street. At around Christmas 2016, he was told about a homeless shelter. From January 2017, he was living in hostel accommodation. Later in 2017, he found a job and moved to permanent accommodation in London.
HM Revenue and Customs (HMRC) issued a notice to file a tax return for 2014/15 on 6 April 2015, which was sent to the appellant at his original London address, being the address HMRC had on their file. The appellant filed his tax return for 2014/15 on 8 July 2017 on paper. HMRC imposed late filing penalties amounting to £1,600. The appellant appealed.
The First-tier Tribunal (FTT) considered that HMRC's decision to pursue the appellant for penalties in the circumstances was a ‘scandal’. The FTT commented: ‘For HMRC to expect a homeless person to keep HMRC up-to-date with their address is ridiculous – and just needs to be stated to show its absurdity.’ The FTT found that the appellant had a reasonable excuse for his defaults and, therefore, allowed his appeal.
The FTT also found HMRC’s decision that there were no ‘special circumstances’ to be flawed. If the appellant did not have a reasonable excuse (which eliminated his liability to penalties) the FTT would have reduced the penalties to zero. The appellant was essentially homeless (or living in temporary hostels) throughout the periods that were the subject of the appeal; for some part of that time, he was sleeping on the street. All his belongings (including documents) had been lost or stolen. It was also apparent to the FTT that the appellant had mental health issues, and this should have been obvious to the HMRC officers dealing with his affairs.
The appellant only found permanent accommodation in around April 2017, and his tax return was filed within three months of that time. No HMRC officer acting reasonably could have reached a decision that the appellant’s circumstances were not ‘special’. The appellant’s appeal was allowed.
Pokorowski v Revenue and Customs  UKFTT 86 (TC)
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