HMRC has decided to challenge a tribunal ruling which was critical of HMRC’s approach to imposing penalties.
HMRC has decided to challenge a tribunal ruling which was critical of HMRC’s approach to imposing penalties. In HMRC v Hok Ltd, the company failed to submit the employer’s annual return by the May deadline because the company mistakenly thought that because the employee had left part way through the year the return was not required. HMRC took months to raise a penalty notice by which time the monthly £100 penalty had racked up to £500. The company argued that had HMRC issued the penalty in a timely manner they would have avoided the further £400. The Tribunal Chairman slated HMRC for taking so long to issue the penalty and HMRC lose the case.
If this appeal goes against HMRC in the Upper Tribunal this will be a binding decision and HMRC will be forced to change its practices (unless they were to successfully appeal to the Court of Appeal). We welcome HMRC’s appeal, should they lose (and we believe they will) an element of fairness will be brought into the penalty game.
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