A man with a terminal illness did not have a reasonable excuse for paying his tax late because of his illness, a tribunal has ruled.
Matthew Roper collapsed in July 2011 and was diagnosed as having a brain tumour. He said that his illness prevented him from paying tax due by 31 January 2012.
He appealed against three penalties for late payment of tax.
HMRC said that although it was and remains compassionate to Roper’s personal circumstances, to have a reasonable excuse for paying tax late an individual must show that he or she has taken action to correct the breach of an obligation as soon as possible.
The Revenue argued that Roper had not done this.
Despite his health problems, Roper filed his 2010-11 tax return on time. He filed his tax return electronically on 6 January 2012.
As part of the filing process Roper was able to calculate his own tax liability and enter the figure on to his own tax return. His tax return shows that he calculated his tax liability as £2,320.68.
After filing the tax return HMRC argued that Roper or someone acting on his behalf, would have been able to pay the tax using by transferring money electronically via the same online system.
HMRC will sometimes agree to allow a taxpayer to settle an outstanding tax debt in monthly instalments.
But to avoid a penalty, HMRC requires that contact is established prior to the penalty date.
HMRC said that there was no evidence to show that Roper or his representative (his wife) asked HMRC for help with paying the tax due.
There is no statutory definition of “reasonable excuse”, although a common definition is an unexpected or unusual event that is either unforeseeable or beyond the taxpayer's control, and which prevents someone from paying their tax on time.
In its ruling, the first tier tribunal [Matthew Roper v the commissioners for HMRC, TCO3857] accepted that Roper has been unable to work because of his illness and did not have the means to pay his outstanding tax.
But the tribunal also said that it was not clear why Roper failed to arrange a payment plan for paying his tax after he filed his tax return online.
“There would appear to be no reason why either he or his appointed representative, his wife, could not have contacted HMRC to arrange a method of paying the outstanding tax over a suitable period of time,” tribunal judge Michael Connell said.