HMRC v Goldsmith [2019] UKUT 0325: Upper Tribunal reverses FTT Decision that s8 TMA Notices to file were invalid

The proceedings: The taxpayer was charged with late filing penalties for failure to submit a self-assessment return under s8 Taxes Management Act 1970 (“TMA”) (“s8 Return”) pursuant to a notice issued under that section (“the s8 Notice”). He appealed against the penalties.  The FTT allowed his appeal because, in its view, HMRC knew the amounts in which the taxpayer was chargeable, such that HMRC had not issued the s8 Notice for the statutory purpose set out in s8 TMA i.e. “[f]or the purpose of establishing the amounts in which a person is chargeable to income tax…and the amount payable by way of income tax…”. For that reason the FTT held that the s8 Notice was invalid and allowed the appeal.  The Upper Tribunal (“UT”) allowed HMRC’s appeal holding that the s8 Notice was valid because it had been issued for the statutory purpose set out in s8 TMA: in particular the UT held that  the purpose of  “establishing” the amounts in which a person is chargeable and the amount payable was apt to cover the situation where HMRC were aware of the amount chargeable (Decision [114]-[119]).

Statutory background: The obligation to submit a s8 Return arises when a s8 Notice is issued by HMRC. The failure to submit a s8 Return by the specified date results in a late filing penalty under paras 1 and 3 Schedule 55 Finance Act 2009. It is well established that in penalty matters HMRC have the onus of showing that the relevant failure has arisen such that the penalties are due. The onus is then on the taxpayer to demonstrate that there is a reasonable excuse or that there are special circumstances that warrant a reduction in the penalty.


Aparna Nathan QC appeared for the successful appellants, HMRC; Rebecca Murray appeared as an Advocate to the Upper Tribunal to provide assistance.

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