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Terminal illness is not a reasonable excuse

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15th Aug 2014
Freelance journalist
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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.

Replies (103)

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By dmmarler
18th Aug 2014 14:31

A good husband

He was probably the only one who knew enough about his business affairs to make the return and - from the information given it would appear he did so to the best of his ability and may have even directed his wife to file the information electronically. As  good husband, he had done what he could to make his wife's life more simple in tying up his business affairs.  When you only do online filing once a year, you may not remember to check the tax payable and when or even to print the return ... and as a result, the tax payment was missed.    The online system is not very intuitive even for accountants.  No-one has said whether Mrs Roper was able to transfer funds electronically - not everyone understands how to do this and may not be so enabled by their bankers.  With everything else going on, I believe that this is a very reasonable scenario and that HMRC and the Tribunal have both made a serious error of judgement.

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By emanresu
18th Aug 2014 14:54

Read the judgement

 

The judgement's conclusion refers to (p.48) "his appointed representative Mrs Roper".   If this was so, then Mr. Roper's ability to deal with the matter is not a cardinal issue.

Note also (p.40) that tax was overdue at least (p.23) 18 months before the medical diagnosis and, happily unfulfilled, prognosis was given.

Without due consideration it is easy to rush to the wrong conclusion - and it is utterly unfair to drag in personal opinions about HMRC, or the judiciary, when discussing this one case.

This is a pathetic case - and before there are any more flames, look up "pathetic" in the dictionary - and should not be exploited.  With the evidence available I think the judgment is correct - but I thank God that I did not have to give it.

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By carroccio1958
18th Aug 2014 15:13

terminal illness
To sum up ;

a) this is a freaking outrage
b) rc and judge to be slowly marinated over a brazier for their lack of basic humanity/compassion as the wife was obviously not a chartered accountant and was ( hello?) grief stricken/ destroyed with contemplation of the imminent loss of a soulmate

c) justsotax and flashgordon are obviously androids and should be ignored as their views cannot encompass human charactetistics thus on the kevel of Dr Spock and his ilk.

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By justsotax
18th Aug 2014 15:36

J&H

you may well be right...but if we are to believe all that has been said...then why oh why would he waste his time fighting a £300 penalty - surely he has better ways to spend his final days...and why not add an 'up yours' to the revenue given they cannot collect what he doesn't have.  But like you say there are 3 sides to every story...his, the revenues and some where in the middle the telling facts.

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By Flash Gordon
18th Aug 2014 15:44

Splendid timing

What great timing - the add down the side of this (on my screen anyway - I don't know if different people get different ads) is for a new tv show and says:

"Resurrection - the hit new US series - tonight 9pm:

His death was devastating.....

His return worse...."

 

Is that his tax return?! 

 

 

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By Jekyll and Hyde
18th Aug 2014 15:55

For the record...

.... I do not share the above view with respect to Justsotax and Flashgordon. I feel that as a regular Aweb viewer, further can be from the truth in respect of them. I consider that they and indeed a couple of others that share a different view on this thread are very upstanding members of this forum and their contributions are very gratefully received and I would like to distance myself from carroccio1958 as I value their input on this DEBATE and on many other issues. As I suspect some may like to distance themselves from my views on HMRC.

For the record, I have a very low opinion on HMRC and of their staff in general and this may bias me in this and other debates, but is drawn from my past and present experiences with dealing with HMRC. If I were a member of HMRC staff on this case, given the limited facts outline, I would have asked for more information. I would have made the active decision not to pursue this to tribunal and if necessary I would resigned my position. AND for the record I have resigned from 3 previous positions due to my principles on ethics and that is why I am happy to judge HMRC as I do. I do wonder if others on this forum who are saying that HMRC are correct would be happy to pursue this case if they were the HMRC staff, I would not. 

We do all speculate on facts of this case as there are not many given real facts about his medical condition or his ability or inability and means to pay. 

As always the reason I like AWeb is that we have an ability to debate and disagree with each other and share our views. Lets not forget this.

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By trecar
18th Aug 2014 18:00

What happens next?

Yipee, HMRC won. So what do they do next? There lies the rub. If taxpayer has no assets except those necessary to live then HMRC have wasted a lot of time, effort and dosh to score a point. If the taxpayer has excess assets then they may be in with a chance of getting some of their justly demanded flesh. However, it appears that the taxpayer has been on benefits since the illness was diagnosed so chances are cash resources are pretty limited. I also noticed that the hearing was held in absentia and the stated case was not answered (wonder why?). All in all a prime case of HMRC looking as though they may have chosen the wrong individual to chase and make an example of. Looks like a classic case of the shot and the foot.

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By philiprjones
18th Aug 2014 18:48

I must say I am appalled by this decision - I have noted the several views that the tax-payer should or could have paid up on time but quite frankly I am surprised he managed to do his return in the first place.

Its clearly another easy target on a law abiding citizen when millions of pounds of tax payers money go to waste on the disjointed benefits system that is still in full swing here.

Having been on high strength prescription drugs for several years until a non drug alternative was made available I can fully understand the taxpayer's dilemma.

 

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By AdShawBPR
18th Aug 2014 21:20

Disgusted

This is disgusting, utterly stupid and saddens me greatly.

HMRC slam people entering into tax planning arrangements because they are against the letter of the law but do they really think Parliament intended penalties to be used for cases such as this? Perhaps HMRC see this as the ultimate tax planning arrangement.  (Is it in the spotlights page yet?)  Is there really no-one left at HMRC with the intelligence or wit to have withdrawn this before it got to this stage?

This is at the same time as HMRC want to have the power to take funds out of people's bank accounts without the oversight of a court.

No matter the detail; justice should be done and should be seen to be done.  Can't see that here at all.

HMRC is not fit for purpose.

 

 

 

 

 

 

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Replying to Vile Nortin Naipaan:
Wild Billy Hickok
By Wild Billy
18th Aug 2014 22:46

For all those with an opinion...

... have you READ the judgement and ALL the facts? Not just the headline. Not just the summary by other people who haven't read the judgement. Seriously. Read it. All of it. As a tax professional, it is your responsibility to READ ALL of it and then comment. It is very obvious reading the responses who has actually read it and who hasn't. 

If you then form the same opinion then fair enough but please don't form an opinion without all the facts. I hope you wouldn't do that professionally and you shouldn't do it here either because it just demeans us as a profession who should be able to comment more sensibly on tax issues than the average reader of the Daily Mail. 

The previous posts says "No matter the detail; justice should be done and should be seen to be done.  Can't see that here at all." Seriously? The detail doesn't matter?! Ridiculous. Absolutely ridiculous. God help the people you represent. 

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Replying to Roland195:
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By AdShawBPR
19th Aug 2014 20:59

An opinion is an opinion...
I have not read the full details of the case, my response being an emotional one. The public read headlines in papers (The Times as well as the Daily Mail) not the detail so that is how they will react to judgements such as this. HMRC may be correct technically but I don't think it helps their cause nor ours. I do object to your personal comment about God helping my clients as this is unnecessary and you do not have all the facts - something I know is important to you.

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By richardterhorst
19th Aug 2014 09:21

leon0001 is right.

My brother has a brain tumour. You have your good days and bad days. Bad days are bad! Pumped full of morphine to take the excruciating pain away and at times failing. Then on good days complementis. 6 Jan to 31st Jan is a lifetime.

And the wife? I watched my brother and had a breakdown. I watched my mother and she coped with much support. Just.

HMRC and the tribunal may have been acting legal but they have no idea. None whateshowever.

Fortunately for my brother after 6 major brain ops and 2 years in hospital his cancer is in remission but due to the severe trauma to his brain is now in first stages of dementia and he was not yet 50 when it started.

 

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By leon0001
19th Aug 2014 11:40

Tumour

@emanresu and @Wild Billy

You just don't get it about brain tumours.

Just because the tumour was only diagnosed 18 months later does not mean that it wasn't there for months or years and already affecting his mind. One of the common pointers to this condition is where a person begins to have "absences", periods when he appears to be conscious but actually isn't. There can also be bits of personality, memory or skills which progressively cease to exist. Sometimes the sick person, close family and friends don't notice any problem, it's only when someone who only sees him from time to time notices that there is an unusual change and tells the family to arrange a doctor's appointment.

As I have previously said, you cannot reasonably expect him to behave normally.

And more than once, I have had dying clients tell me that they are just "not interested - leave it until after I am gone". HMRC have never yet pushed compliance in these circumstances, but in order to avoid distress to the client, I always arranged for all future correspondence to be addressed care of my office.

Unfortunately, this fellow was unrepresented and therefore torn to shreds by a predatory and poorly supervised system. 

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Replying to marks:
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By emanresu
19th Aug 2014 15:39

..

leon0001 wrote:

@emanresu and @Wild Billy

You just don't get it about brain tumours.

....

I have had dying clients tell me that they are just "not interested - leave it until after I am gone".

No, YOU don't get it AT ALL.  My plea was that folk should read the judgement  NOT draw assumptions based upon their own prejudices - and there YOU go doing it again and again.

So YOU know that I don't get it about brain tumours - how?

So YOU have had a dying client and that makes you an expert witness on how dying clients feel?

So you were there to see Mr Roper "torn to shreds by a predatory and poorly supervised system"?

It is just so awful to see so many contributors to this conversation showing their worst sides.

COOL IT.

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Replying to lionofludesch:
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By leon0001
20th Aug 2014 11:46

Please stop shouting.

@ emanresu

Yes, I read the judgement.

Yes, it appeared correct in law based on the limited evidence the tribunal saw.

My main points are that:

- it should never have got as far as a listing in the first place

- there was no medical evidence at all

You don't get it that serious illnesses, diagnosed or undiagnosed, can substantially interfere with the taxpayer's reasoning, judgement and capacity to consistently behave as a healthy responsible citizen ought? This is the impression I have drawn from your comments to date.

I am not claiming to be an expert on how dying clients feel, only reporting the attitude of some I have dealt with, my view that such attitude constituted behaviour which was reasonable in the circumstances and that, as their agent, I had the opportunity to forestall similar problems befalling them.

My working experience is that, as presently constituted:

HMRC, unless checked, tends to act in a predatory way; and

it is increasingly poorly supervised - knowledge of the law and manuals, sense and judgement are being progressively squeezed out of the system.

Mr Roper was inequitably treated - kicked when he was down. This may have been a legal success for HMRC but definitely a failure of the system with regard to safeguards for vulnerable citizens.

 

 

 

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Replying to atleastisoundknowledgable...:
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By emanresu
20th Aug 2014 18:28

..

leon0001 wrote:
Yes, it appeared correct in law based on the limited evidence the tribunal saw.

...

- there was no medical evidence at all

...

You don't get it that serious illnesses, diagnosed or undiagnosed, can substantially interfere with the taxpayer's reasoning, judgement and capacity to consistently behave as a healthy responsible citizen ought? This is the impression I have drawn from your comments to date.

A significantly calmer response - thank you - but the three extracts above still seem to be speculations/assumptions.  Please correct me if you know from direct sources that limited evidence, without any medical evidence at all, was presented.  If not, don't speculate.

As for your third assertion, I am in an unchallengeable position to know that you ARE speculating ahead of any knowledge.

Now, think on this.  The law has to strive to find a balance between public and personal good.  In doing so it is bound occasionally to deliver decisions like this.  My reading of the judgment given is that it had all necessary evidence - including medical evidence - placed before it and that the judgement hinged (see para.43) upon whether the defence presented constituted " 'exceptional, abnormal or unusual' (Crabtree v Hinchcliffe) or 'something out of the ordinary run of events' (Clarks of Hove Ltd v Bakers' Union).".  Serious illness is neither exceptional, nor abnormal, nor unusual. Neither is it something out of the ordinary run of events.  Death is the ultimate profession of us all.  Individuals therefore have a duty to prepare against those events - be they sudden or protracted.  The court could not ignore the precident of the previously quoted cases - and could not set a new precident by which that duty could be circumvented in any way.  Think about what would happen if it did, and that judgement then became precident.

As for HMRC's decision to proceed in the first place  - and, note, that this is my first reference to them - I agree that HMRC can be irrational and believe that they seriously need to justify the powers they have - and the powers they are hoping to be given - by upping their professional standards considerably.  Nevertheless, they - and we - cannot allow there to be any ambiguity as to the effect of illness or death on the liability to pay due taxes.  If we do, then we enable a loophole which will rip society apart.

 

 

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By mccabesworld
19th Aug 2014 12:04

Disgrace

HMRC make some abysmal judgements but this one - to inflict penalties on this poor chap and then mug him in the Tribunal - is a disgrace.  Stalin would be proud of them!

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By carroccio1958
19th Aug 2014 17:18

I ve read the full freaking judgement you pedant..
....AND MY CONCLUSIONS WERE ARRIVED AT AFTER REPEAT AFTER THIS READING .

( don t shout ......apparently you British consider it impolite !)

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By techexpert
19th Aug 2014 17:34

Missing The Point

I'm sorry to say some contributors (no doubt the HMRC sympathisers) are TOTALLY missing the point here.

These are the actions of a ruthless, uncaring bully of an organisation who regularly give out incorrect, unclear advice to taxpayers and agents; who don't communicate effectively between departments and who, frankly, are quite clearly trying to make an example of this poor man, Mr Roper, irrespective of the predicament he is in.

HMRC regularly slip up in so many areas, and the individual taxpayer (as in this case) has little or no opportunity to defend him/herself, even at a First Tier Tribunal.  In my experience the average man / woman would be terrified of having to present a case against HMRC, when being bombarded with quotations of section numbers, case law, statutory instruments, guidance notes....and that is when they are fit and well!  Who in our profession would have offered to represent Mr Roper in his Tribunal hearing for a minimal fee, just to give him the fair trial he deserved?  Very few, I would suggest.

The man had a terminal illness - FACT

He tried to keep his tax affairs up to date - FACT

He did some - but not all - of what he needed to do - FACT

So where is the person with common sense at HMRC who looks through all the legal and regulatory mumbo-jumbo to see exactly what is going on here?  Where is the benefit in bringing such a case against such an individual where many millions of pounds are going uncollected each year?  A total waste of public money in my view for a petty, hollow victory. 

The fact that HMRC repaid tax for 2012-13 makes the whole case even more ridiculous!  Do they not know how to offset one year's liability against another year's debt? Clearly not.  Have they forgotten about time to pay provisions, individual arrangements or payments on account?  Obviously.  Such a proposal, and a more human approach, would surely have led to a favourable conclusion for the Revenue, but no...

And finally, to those who claim Mr Roper's illness was not truly "terminal" as he was still alive a few years after being diagnosed: you are all very sick in the head.  You clearly do not know, or have not had any experience of people who suffer such terrible illnesses and the daily fight they have to stay alive.

People can be terminally ill for several years, even a decade or more, and every day, week or month they degenerate a bit more.  Their condition can improve and worsen on a daily basis yet they continue through sheer bravery, guts and determination to beat the illness with which they are afflicted.  Take off your accountants' blinkers and see how the real world operates.

I am proud to be a compassionate, caring sole practitioner accountant who sympathises with his clients and their problems.  Thankfully I am not in the selfish, uncaring camp, which HMRC and some contributors are firmly rooted. 

 

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Replying to paul.benny:
Wild Billy Hickok
By Wild Billy
20th Aug 2014 23:59

Test

techexpert wrote:

I'm sorry to say some contributors (no doubt the HMRC sympathisers) are TOTALLY missing the point here.

These are the actions of a ruthless, uncaring bully of an organisation who regularly give out incorrect, unclear advice to taxpayers and agents; who don't communicate effectively between departments and who, frankly, are quite clearly trying to make an example of this poor man, Mr Roper, irrespective of the predicament he is in....

I am proud to be a compassionate, caring sole practitioner accountant who sympathises with his clients and their problems.  Thankfully I am not in the selfish, uncaring camp, which HMRC and some contributors are firmly rooted. 

Everyone should be made to read this as part of basic accountancy training and then be asked the following questions:

If someone holds a different opinion to you then do you (a) generalise that they must be "other" to you and assign them, without evidence, to a grouping that has negative connotations (including "selfish", "uncaring" or "HMRC sympathisers" in order to further your own opinion?, or (b) listen to their opinion, understand whether it is based on the law and the facts, and then evaluate whether there is a chance that their opinion is at least as valid as yours, orAs an accountant, will you be best served by (a) generalising, possibly based on your own experience but not necessarily, in order to further your own opinions or (b) considering each situation on its own merits?As an accountant, will you (a) take a confrontational attitude to the relevant tax authority in your country and make assumptions about other human beings working in that organisation or (b) understand that the tax system, you, and others will work better if you take a more measured and considered approach?As a tax professional, do you understand that there will always be hard cases on borderlines but (a) not consider the implications for the wider tax system (and creep) of always applying the approach that best suits my opinion or (b) consider that some hard cases will always exist because you cannot produce legislation and guidance for every conceivable situation?

If you answers are mostly (a) then you should seek a career as a low rate journalist for a right wing newspaper. If your answers are mostly (b) then you can proceed to the second page of the accountancy manual.

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By The-public-sector-sucks
19th Aug 2014 20:07

No mercy to the ps in return.

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By FCExtraordinaire
19th Aug 2014 22:54

Unfortunately

it is technically correct.  Morally? - probably not by the HMRC,  but they are an organisation with no heart ! 

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By AndrewV12
20th Aug 2014 08:56

HMRC settlement

Why could HMRC have been kind and  agreed the tax and got the taxpayer to pay it without delay, no need for  appeals, letters etc. 

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By SJH-ADVDIPMA
20th Aug 2014 14:17

Judge Dredd
The judge has made his decision.

This trail of argument is a little pointless.

Life's too short.

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Wild Billy Hickok
By Wild Billy
21st Aug 2014 00:18

There is a really interesting article to be written....

... about the role of tax professionals in the tax system? Not the debate about the role of advisers in relation to avoidance schemes or whether there are morals in the tax system. Rather the debate about what responsibility we have to take an informed position and provide balanced commentary even if it is unpopular. I am not a big fan of much of what has been written in this thread because it could have been written by the same people who comment on the Daily Mail articles. It is full of speculation, misinformation, conjecture, prejudice and lack of respect for fellow professionals others who hold different views, descending into [***]-for tat on whether one person is more caring than next is a "HMRC sympathiser". I could point to numerous other examples.

That goes for AWEB too. Some of the article are not well informed and just repeat what is in the main press without giving it the considered opinion on tax professionals who know, or should know, the truth. Take the article on HMRC plans IHT avoidance crackdown, which continues the call that people may be forced to pay IHT "upfront". I took the time to read that consultation and that is not what it says at all. In fact it says exactly the opposite, despite what appeared in a few papers. Now, when I can get a more accurate picture from the Daily Mail (albeit only one section because another section at the very same time was repeating the speculation that you would pay upfront) I am concerned about what is happening to the quality of debate and commentary in our industry. 

So, I wonder whether anyone more articulate than I is up for writing an intelligent, considered and balanced article on the state of debate and commentary amongst accountants and projected to those outside the profession? 

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By cfield
21st Aug 2014 14:30

Should have asked for Special Reduction

In my experience, the case handlers at TAA are more sympathetic than the regular HMRC bods if an appeal is referred to them under "special circumstances" which was clearly the case here. It's called Special Reduction and they seem to have more leeway to make sensible decisions than the Tribunals who have to follow law, precedent and procedure.

Unfortunately, HMRC tend not to mention this avenue of appeal once the reviewing officer has rejected the initial appeal, so people are steered towards the Tribunals too early. As Mr Roper did not have professional representation, obviously he wouldn't have known about this, but as practitioners we should always consider whether special circumstances apply before going to Tribunal.

By the way, I'm glad to see the members are being a bit more polite than the author of this article. Nick, you should refer to him as Mr Roper, not just plain old Roper. Have a bit of respect please! He's not a criminal - even though HMRC have treated him like one.

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
21st Aug 2014 09:41

@Wild Billy - thanks for your feedback, but...

Thanks for your feedback on this story and the debate that followed. We always welcome your contributions and appreciate the counter-ballast you provide to some of the other points of view expressed on AccountingWEB.

While some of the members' views and behaviour may exasperate you (they do the same to me occasionally), we think it's to the profession's benefit that debates like this do take place so that we can all get insights into decisions and facts that affect the profession - and the emotions they arouse, which can be very strong.

Those people who do sling around phrases like "HMRC sympathiser" should take a pause to consider whether they are behaving appropriately. It's a lesson for everyone to oppose the view, but respect the person who made the comment.

Just remember WB that in some quarters "people who comment on the Daily Mail" might also be taken as an insult.

Turning to your criticism of AccountingWEB's coverage, the article you quote on AccountingWEB refers to an IHT consultation that does propose extending the DOTAS/accelerated payments regime to include certain inheritance tax schemes (para 240 et seq in the DOTAS-VADR consultation paper.)

I accept that the article of which you complained is a bit thin on technical detail, for which I apologise, but I do not think it is an inaccurate summary. You have pointed out other shortcomings in the past, which we have taken on board. In recent weeks, for example, we have started a new series of articles to beef up this aspect of our coverage with summaries of the Finance Act and ongoing tax consultations

Andrew Goodall, a previous tax editor on AccountingWEB and a qualified CTA, has been helping us with this project and will be working closely with us in the coming months to meet your demands for more meticulous, informed coverage of tax issues - including anti-avoidance measures.

When we get the opportunity, we will ask him to consider the state of that debate and to produce an analysis of the kind you requested.

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By leon0001
21st Aug 2014 10:45

@ emanresu

Assumption?

"30.    The Appellant explained that in July 2011 he was diagnosed with a terminal brain tumour and that his illness prevented him from settling his tax bill by the due date of 31 January 2012. Although no medical evidence has been presented to support this assertion, HMRC accept the truth of this statement." (my bold)

Pretty clear to me - no medical report.

The other point that I am trying to get across is not that I am sure about the presence of illness or the specific effect of symptoms. What my experience of life tells me is that such circumstances give a significant reason to doubt the taxpayer's capacity to act "properly" and that such doubt ought to be addressed at some point in the process.

I am not questioning the Tribunal decision - the failure rests in the HMRC systems and procedures as currently operated which resulted in this case being listed for hearing.

I am not saying that the organisation is necessarily irrational. However, the standard of service and competence it provides now varies drastically and is still deteriorating. The unrepresented small Self Assessment taxpayer no longer receives the same care and attention as when there were local tax offices. The service has been fragmented and there is no longer one allocated tax officer responsible for an individual case.

The points of contact now available are help line operators, whose powers and knowledge are very limited, and the DMB who range from the patient, knowledgeable and sensible to some who are quite frankly, bullies. Pot luck as to who you get. As to dealing with the same person twice - forget it.

I am not going to discuss the external debt collectors here, I have work to do today.

Finally, I agree with one of my colleagues who recently said that HMRC is being "de-skilled". How does this benefit society?

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Replying to Richard Grant:
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By emanresu
21st Aug 2014 11:21

..

leon0001 wrote:

@ emanresu

Assumption?

"30.    The Appellant explained that in July 2011 he was diagnosed with a terminal brain tumour and that his illness prevented him from settling his tax bill by the due date of 31 January 2012. Although no medical evidence has been presented to support this assertion, HMRC accept the truth of this statement." (my bold)

Pretty clear to me - no medical report.

 

Agreed, no medical report, but I was criticising your assertion that "there was no medical evidence at all".  Para.30 is direct proof that Mr. Roper made a statement in evidence regarding his medical condition.  The court responded to this evidence in its judgement.

Leon, you are one of the more thoughtful correspondents in this thread, but your "Pretty clear to me" is one step on the way to the outrageous certainties expressed in some of the other correspondents' postings.

Would that life was so black and white.

 

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Replying to atleastisoundknowledgable...:
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By leon0001
21st Aug 2014 15:35

@emanresu

"Would that life was so black and white."

If only...

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Replying to DJKL:
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By Nicki Sanday
21st Aug 2014 23:59

A call for compassion

 

 

Having read the judgement in full I believe that HMRC should not have imposed penalties in this case.  Obviously I am not in possession of the full facts, but this does not mean that I am unable to form an opinion based on the facts available to me and influenced by my own experiences and values.

To me, these penalties are not morally acceptable, nor is there any benefit to be gained from them.  In my opinion, the aim of any penalty system should be to encourage compliance, not simply to be punitive.  I fail to see how these penalties will encourage compliance from Mr Roper or anyone else in similar circumstances.  I cannot, therefore, see any positive reason for their imposition.

HMRC has sufficient discretion to enable it to negotiate with large corporations who seek to avoid huge amounts of tax and to agree deals with such corporations.  If it is able to do this I see no reason why it should not exercise similar discretion with regard to penalties for individuals who are ill and have no means to pay.

I am rather perplexed by some comments.  Specifically:

“Serious illness is neither exceptional, nor abnormal, nor unusual. Neither is it something out of the ordinary run of events.  Death is the ultimate profession of us all.  Individuals therefore have a duty to prepare against those events - be they sudden or protracted.  The court could not ignore the precident of the previously quoted cases - and could not set a new precident by which that duty could be circumvented in any way.  Think about what would happen if it did, and that judgement then became precident…  they [HMRC] - and we - cannot allow there to be any ambiguity as to the effect of illness or death on the liability to pay due taxes.  If we do, then we enable a loophole which will rip society apart”.

Mr Roper was not seeking to evade his tax liability.  His appeal, as I understand it, only concerned the penalties and did not relate to the tax liability, which remains payable.  I therefore fail to see how a decision not to impose penalties would create ambiguity as to the liability to pay due taxes.  So far as I am aware, failing to impose penalties does not cancel the tax liability! I cannot see how any precedent created by “waiving” penalties for someone who is terminally ill and does not have the means to pay could create “a loophole which will rip society apart”.  This seems like hyperbole, or another “step on the way to the outrageous certainties expressed in some… postings”.

The loopholes and precedents that worry me are those created by elaborate tax avoidance schemes and deals between HMRC and large corporations.  The loss of revenue from not imposing penalties on Mr Roper (or anyone else in comparable circumstances) is inconsequential.

I agree that illness and death should not eliminate a tax liability; but I believe that any tax system should have room for compassion and humanity.  And as part of an ability to exhibit compassion, I do not believe it is beyond the wit of HMRC to look at Mr Roper’s circumstances and decide that imposing penalties on him serves no useful purpose and is inhumane.

That death will come to us all is obviously indisputable.  But that does not make being diagnosed with an incurable brain tumour normal, nor something that he could reasonably be expected to foresee and “prepare against”.  It is one thing to accept personal responsibility and pay our fair share of tax when we can, but something entirely different to anticipate and prepare for every possible eventuality. 

Cancer is utterly destructive of the body and is no respecter of timetables.  Some people are told they may have only months to live but actually live for years; others are told they may have several years to live but die within weeks – my father being an example of the latter.  The impact of incurable cancer upon the person concerned is often devastating, as is that upon close family and friends.  Living with the diagnosis is bad enough, but add to that the pain, the deterioration, the side effects of chemotherapy and other drugs and you have an almost unbearable situation.  For relatives, it is horrific to watch someone being destroyed by cancer, vanishing before your eyes, living with excruciating pain.

Having watched my father and several other friends and relatives die of cancer I would not expect anyone who is suffering in that way to act logically and sensibly whilst in the process of dying.  As a close relative of someone dying in this unspeakable way, I functioned on autopilot and expect that others do the same.  My autopilot allowed me to fill in forms and pay bills because that’s what I do for a living, but I avoided contact with HMRC as it was too stressful.  So I can completely understand that Mr and Mrs Roper would struggle to deal with the HMRC machine and would ignore the debt they couldn’t pay for as long as possible. The circumstances certainly constitute a reasonable excuse to me.

My husband has suffered serious health problems for the past 14 months and I have also been unwell.  Nothing terminal, but we both have chronic, painful, incurable conditions that have been seriously debilitating.  Few people have, or want to have, any understanding of the strain that such ill health brings and the utter exhaustion that results from prolonged illness.  But that doesn’t diminish the trauma.

We are fortunate; we have been able to carry on working with a significantly reduced workload as my husband has his state pension, which helps maintain our modest but adequate income.  Many others are not as fortunate.  So, in small ways, we try to help those who are less fortunate, to demonstrate compassion and kindness.  As the song says, “there but for fortune”. 

I believe that acts of compassion and kindness benefit the giver as well as the receiver.  So I have a radical idea for this community.  This post has been read by thousands; dozens have posted comments.  If just over 100 of us contributed £20 each, the outstanding tax and penalties could be paid and Mr and Mrs Roper could have one problem taken off their plate.  I am happy to contribute.  Will anyone join me?

I love words, but sometimes words alone are not enough: actions speak louder.

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Replying to SJRUK:
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By Al-Aaraaf
22nd Aug 2014 15:20

Reasonably reasonable

Nicki Sanday wrote:
Having read the judgement in full I believe that HMRC should not have imposed penalties in this case.

The facts stated in the case suggest that charging the penalties were reasonable on the face of it.

Quote:
18. HMRC issued a notice of penalty assessment on 10 April 2012 for £116.00; that is, 5% of the tax unpaid at the penalty date.

19. HMRC issued a notice of penalty assessment on 4 September 2012 for £84.00; that is, 5% of the tax unpaid 5 months after the penalty date.

20. HMRC issued a notice of penalty assessment on 19 February 2013 for £84.00; that is, 5% of the tax unpaid 11 months after the penalty date.

 

22. The Appellant submitted an appeal against the 2010/11 late filing penalties to HMRC on 2 December 2013.

Each of the penalties were charged under circumstances where the tax was unpaid and where there is no evidence that HMRC was aware of the underlying issue.  It's perfectly fair to expect HMRC to behave reasonably, but you can't ask someone to take into account facts they have no realistic chance of knowing about.  Insofar as that goes, the penalties seem to have been properly charged and to have been due.

It's possible that in asking that HMRC enter into a payment arrangement Mr. Roper shot himself in the foot on the reasonable excuse grounds.  It's difficult to say since reasonable excuse grounds require that you take steps to take remedial action as soon as the excuse ends and this isn't readilly applicable to this.  To my reading this appears to be the line of reasoning the judge has taken.

How neither HMRC nor the judge felt that a special reduction was appropriate is beyond me.  It's possible to argue that the judge didn't feel he could rule on that in that there was strictly no application for a special reduction at a push.

 

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By SJH-ADVDIPMA
21st Aug 2014 15:09

Yawn
My lord, no wonder accountancy fees are large, not enough work to be getting on with.

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Replying to Tax Dragon:
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By leon0001
21st Aug 2014 15:41

Are we boring you?

@SJH 

Then why have you bothered to comment - twice?

By the way, I am sure that reading articles on this website and discussion of the matters raised counts as CPD.

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Replying to Kaylee100:
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By SJH-ADVDIPMA
22nd Aug 2014 14:31

yawn

leon0001 wrote:

@SJH 

Then why have you bothered to comment - twice?

By the way, I am sure that reading articles on this website and discussion of the matters raised counts as CPD.

It was my 3rd post, it's not boring me because I'm not reading it. Just amazes how long some replies and deep the analysis. It's a serious criticism, how do you have the time, and is someone else paying for it? Sorry if it's in your evening. If it wasn't so futile it might be CPD.

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Replying to lionofludesch:
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By leon0001
22nd Aug 2014 17:31

Amazed, eh?

Sorry.

Having just re-read your first comment, it's now obvious to me that you aren't paying attention. 

Get back to work this instant. Who needs CPD anyway - you might accidentally learn something useful.

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Replying to lionofludesch:
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By Nicki Sanday
23rd Aug 2014 19:03

Just for the record...

 

No one is paying for my time.  I am giving it completely free of charge.  This is not unusual.  The things I do without payment frequently feel more important and more satisfying than the ones for which I get paid, so I choose to make time to do things that matter to me.  I value quality of life highly and have little interest in the pursuit of material wealth, beyond earning what I need to be comfortable. This way of life suits me. I do not expect anyone else to do the same, but neither do I expect to be criticised for that choice.

For me this is not about CPD; it is about discussing issues, increasing understanding, trying to help someone in need. I do not consider the discussion of moral issues, the pursuit of greater understanding or the desire to help those in need to be futile.  You are perfectly entitled to consider them futile, but I am just as entitled to consider them important without being criticised or derided.

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By naomi2000
21st Aug 2014 20:05

Case report explains what went wrong

The case report shows that Mr Roper didn't attend the hearing or make any written representations. The only material laid before the courts was a summary prepared by HMRC. No medical evidence was provided or material provided about the debilitating effects of a brain tumour. There is no mention of the Ropers having any access to professional advice or of the involvement of any of the tax advice charities.

Reading the case summary, it looks as if we have an ordinary taxpayer who hasn't known the ropes .He and his wife apppear to have made some efforts to sort things out but not to have known exactly what to do or how to do it or to have persisted with his efforts to sort things out . Readers who have experience of chemotherapy themselves may not find the latter statement particularly surprising . However, HMRC (or for that matter tribunal judges) are not medical experts any more than we are and don't have access to in house expertise. 

I suspect that if Mr Roper had been represented or had been able to attend the hearing himself, the case may have been decided very differently. I hope that the coverage of this case does not deter other practitioners from arguing forcefully against penalties in similar situations .

I feel very sad that Mr & Mrs Roper have had to deal with this on top of their other troubles.

 

 

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By Roland St Clere-Smithe
22nd Aug 2014 13:07

Yes.... I will

It's a great idea Nicki.

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By mccabesworld
22nd Aug 2014 23:15

Fantasy poem

This is the way it used to be

in HMRC.

A case officer would prepare the case

And stick in front of my face

And I would say "Ay, ay"

"I smell something awry"

and I would toddle off......ee

In Whitehall to have a coffee (got ya)

To take advice from a man who

eveything new

as you do

Accountants ye are

But better by far

is to wake up and smell the coffee

HMRC are [***].

 

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By Nicki Sanday
23rd Aug 2014 15:15

Thanks, apologies and still a call for compassion

Many thanks Roland; I hope others will follow.

My apologies to Al-Aaraaf and others.  In a largely unsuccessful attempt to shorten my comment I deleted a vital sentence.  This was to the effect that, upon receiving Mr Roper’s appeal (which I acknowledge was late), someone in HMRC should have reacted with humanity and compassion, decided that penalties were inappropriate, accepted the appeal and cancelled the penalties.  In addition to being an act of decency this would also have avoided the expense of a tribunal.  I realise, of course, that the penalties were initially charged prior to HMRC having knowledge of the circumstances.

My apologies also for the length of my comments.  My response to this thread is predominantly personal rather than professional.  Irrespective of what I do in the way of work, my first priority is to try to be a caring and compassionate human being.  I accept some people may regard this as inappropriate on this forum; if so, they can obviously ignore me.

For those who didn’t have time to read but are interested, my main feelings are that:

The world is short of compassion and empathy;Few understand the incredible difficulty and stress of living with long-term illness, especially when it is incurable, deteriorating, painful, utterly debilitating and requires horrible treatments;From experience, I completely understand the actions that Mr and Mrs Roper took and didn’t take, even though these may not always seem logical or sensible;I believe that Mr Roper’s terminal illness constitutes a reasonable excuse;Even small acts of kindness and compassion benefit the donor as well as the recipient and help reduce the overall amount of suffering in the world.

So, I will repeat my radical idea. This thread has been read by thousands; dozens have posted comments.  If just over 100 of us contributed £20 each, the outstanding tax and penalties could be paid and Mr and Mrs Roper could have one problem taken off their plate.  I am happy to contribute.  So is Roland. Will anyone else join us?

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By cfield
23rd Aug 2014 16:05

Switching off

Does anyone know how to switch these posts off? Twice now I've changed the new comments box below to "Never" and clicked Post but it doesn't seem to work. Maybe you have to actually post something. If so, this will become a rhetorical question as I won't see the replies. Fingers crossed anyway!

And Nicki - put me down for £20 too. You can send me a PM with the bank details.

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Replying to Tom 7000:
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By Nicki Sanday
23rd Aug 2014 19:09

Thank you Cfield.  I was wondering about using a "donations" website so people would be more comfortable about giving.  I have never set up something like that before so will wait to see if there are any further responses before looking into it.  There are obviously charges and I am a bit of a technophobe, so it wouldn't be worth investigating without a decent number of pledges!  I will PM you when I know more.

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Replying to NH:
By cfield
23rd Aug 2014 22:10

Contributions

Hi Nicki, I got your PM. The switching off worked. Just a nuisance having to post a comment simply to do this. You'd think AWeb would allow you to modify your settings without adding unnecessary comments. There's been enough of those already!

Anyway, sites like JustGiving are only for registered charities, not individuals, so not possible to use them unfortunately.

Before going down this road any further, I think you should contact Mr & Mrs Roper and ask if they mind a load of strangers paying their tax bill for them. They might be quite embarrased to hear of all the fuss and strong emotions it has caused on AWeb, and they might object to someone they don't even know raising money for them without their say-so. A lot of people don't want charity out of pride or principle.

Even if they are happy with the idea, you then need to set up a separate bank account for people to pay into, with the proceeds designated for Mr & Mrs Roper. Some donors might want to see some kind of verification of that. Maybe a letter from the bank you could attach or paste a link to.

Do you actually have their contact details? How were you planning to get the money to them?

All in all, this might prove a bit more complex and difficult than you first anticipated. Still, if you're happy to go along with it (and the Ropers don't mind) I'll stand by my pledge.

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Replying to kenny achampong:
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By Nicki Sanday
25th Aug 2014 00:18

Practical complexities

Thanks for your input cfield.  Yes I have been pondering some of the practical difficulties.  I realise JustGiving is not appropriate but had wondered about something like Go Fund Me.  It's an American site but I've made donations to individuals in the UK through it - when people are trying to raise money for things like medical treatment not available on the NHS.

Contacting Mr and Mrs Roper will be a challenge as I don't have their details.  The only idea I have at present is to ask HMRC to pass my details to them.  I may often despair of the HMRC as an organisation, but that doesn't mean it doesn't employ some decent individuals who may be willing to help.  Obviously that may not work, but I haven't come up with any other ideas yet.

I absolutely understand that Mr and Mrs Roper may not want assistance and would certainly not collect any money without their agreement.  But I would also feel  reluctant to approach them when there are only 3 pledges.  Offering to help and then only coming up with £60 could seem like an insult.  I had therefore intended to wait and see what happens before trying contact them.  If there were plenty of pledges but then it transpired they didn't want help there would be no money actually collected in so nobody would have lost out.  On the other hand, I don't want to risk raising their hopes only to find there is very little support.

 

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By SJH-ADVDIPMA
24th Aug 2014 15:10

Moral issues
Fortunately it's a free country, so I can critiscise and deride to my hearts content

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By David Gordon FCCA
25th Aug 2014 12:04

That is the point

 

I declare a direct interest in all your comments. At the moment I am arguing three penalty decisions. So I have reread all the comments.

Please set aside the righteous indignation. It seems that if this representative sample of accountants is anything to go by, HMRC has a serious PR problem. This is not meant as a facetious comment.

The unpalatable truth is, that whilst we all complain and rightly so, we (Accountants in public practice with the professional bodies) willfully will not effectively join together to tackle and confront this problem. So HMRC  may, justifiably, ignore us. This even though HMRC rely on the profession being the oil that stops the machine grinding to a halt.

As the man says: The regulation states:

 where the strict application of the penalty law produces a result that is contrary to the clear compliance intention of that penalty law.

 To the best of my belief the the clear compliance intention of that penalty law is

1) To punish miscreants who will deliberately evade paying tax due on time. So encouraging better behaviour next time round.

2) To encourage those who are sloppy or careless in carrying out their contracted agreement with the rest of us, enabling our representatives to fund and manage those things we delegate to that administration service we call "The State".

 In the particular circumstances of this matter,  neither of those objectives may be met. The action of HMRC may therefore be likened to what penal reformers may refer to as an act of revenge  perpetrated by "The State". This act does not contain any element either of constructive punishment, or rehabilitation. 

As an outrageous example, the shooting by the Germans during WWII of ten hostages for one resistance worker, was classified as a war crime. The perpetrator could not hide behind "I wuz only following orders guv'nor".

Although thank God the HMRC officer's action, in this case, does not come within a million universes' of the example, the principle is similar. "Shoot the hostages pour encouragez les autres".

 

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By rockallj
02nd Sep 2014 16:19

I have read the judgement and I have to say that as bold as the facts of the case are, the tribunal were correct, in law. However, I contend that HMRC and the tribunal, although accepting Mr Roper's illness despite no medical evidence provided, but accepted as fact by HMRC, due consideration to the appellant's personal circumstances were not given sufficient weight.

It stated that Mr Roper had filed his return electronically, but there may not have means for him to print the calculation and present it to his wife. As we know, a payslip and calculation doesn't arrive in time for payment, so how could he have paid it this way and furthermore, how could his wife? For all we know, Mr Roper's condition may have deteriorated in those 3 or so weeks before 31 Jan 2012; the judgment doesn't say.

Also, there was considerable weight put upon the fact that Mrs Roper (or Mr Roper) didn't contact HMRC. Mr Roper could have been extremely ill at this point and could have tried to telephone many times and sat on hold listening to the never-ending musak (no agent line for taxpayers, remember) and given up after a hour or so each time and he may have done this, as well as his wife. Again the judgement doesn't say.

About the point about his wife not getting touch with HMRC. Would she have had the log-in details to go online, his NI no, SA ref etc. to do so by telephone? Maybe not; just because they are married, doesn't mean that they know each other's tax affairs inside out. Mrs Roper may have tried to telephone HMRC many times, unsuccessfully, listening to the same old musak, and as we know, unless (and even when one is in place), without a 64-8, it is nigh-impossible for HMRC to deal with you. Again the judgement is silent on this.

The over-reaching point, IMHO, is that not enough consideration has been taken that Mr Roper may have severely incapacitated at various and many points and his wife was expected to pick up the gambit, even though she wasn't appointed as a representative to do so. The judgment assumes that HMRC's systems, phone lines and letters are correct and working properly at all times. We as agents know full-well that the system breaks down at any of these points. How many times have you seen an HMRC or DMU letter without a contact telephone number to query the liability or penalties?

Remember that the Taxpayer was unrepresented. This is a very harsh judgement by "the system". Heaven help any other unrepresented taxpayer in similar circumstances, and there will be many, many of those in various states of incapacity. It shouldn't' be a necessity of a taxpayer to have professional representation in order to appeal against such hard penalties.

 

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Replying to Vile Nortin Naipaan:
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By emanresu
02nd Sep 2014 18:00

..

rockallj wrote:
... even though she wasn't appointed as a representative to do so.

Read the judgement, para 48.

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By rockallj
02nd Sep 2014 19:29

@ emanresu
Mrs Roper's appointment as representative may have been late in the case, perhaps just before the hearing. Who knows; the judgement doesn't say.

It still doesn't detract from my point that had a professional who knows how the system works would have almost certainly had these penalties struck out before it got to the point of a tribunal hearing, whereas the man on the Clapham Omnibus (tax doesn't have to be taxing, remember!) who doesn't know the ropes should be treated in such a heavy handed manner.

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