Coincidentally, a number of First-tier Tribunal decisions have recently been reported involving appeals against penalties for late filing of returns. They happen to have been CIS returns; but the same principles would apply to any document required to be sent to HMRC by a deadline. In each case, the taxpayer asserted that the return had been posted in good time and that it was reasonable to assume that any lateness in receipt by HMRC was attributable to postal delays.
Judge Alastair J Rankin heard three such cases on 22 May “on the papers” (i.e. without hearing oral argument from either side). He had no apparent difficulty with any of the cases: there was no proof of posting so he dismissed the appeals and upheld the penalties.
By contrast, the case of Christopher Michael Oddy [2014] UKFTT 673 (TC) was a full hearing before a two-person Tribunal with a report running to 80 paragraphs. Again, there was no proof of posting but this time the Tribunal (quoting from an earlier case) observed that “obtaining proof of posting is not a legal obligation and HMRC cannot insist upon it. As [the advocate] says, it can be an onerous requirement, particularly for a small business with extended working hours”. The Tribunal found, on the balance of probabilities, that the returns were posted at a time when in the ordinary course of post they could have been expected to arrive in the hands of HMRC by the due date; and allowed the appeals against the penalties.
It is of course to be expected that different Tribunals may come to different decisions on different facts. But it is unsettling that one Tribunal seemed to treat as conclusive a factor which another (correctly, in our view) merely weighed in the balance against other evidence. Our advice? Obtain proof of posting where it is possible and practicable. If it isn’t, good alternative evidence – a contemporary note in a diary, for example – should suffice to convince a fair-minded Tribunal. Nil desperandum.
