Matthew Roper was diagnosed with a brain tumor after collapsing unexpectedly in July 2011. He stated that the illness prevented him from paying his tax by the 31 January 2012 deadline.
Roper appealed against three penalties for late payment of tax.
HMRC declared that although they were compassionate to Roper’s circumstances, to have a reasonable excuse for late payment of taxes an individual must demonstrate that he or she has tried to correct the breach as soon as possible.
They argued that Roper had not done this.
Despite being unwell, Roper filed his 2010-11 tax returns before the deadline – filing his returns electronically on 6 January 2012.
During the filing process Roper was able to calculate his own tax liability as £2,320.68 and enter this figure on to his own tax return.
Subsequently HMRC argued that Roper or someone acting on his behalf could have been able to pay the tax easily by transferring money electronically via the very same online system.
Also, HMRC will occasionally agree to allow a taxpayer to pay the outstanding debt in monthly installments.
But, in order to avoid late penalties, HMRC requires contact from the taxpayer prior to the penalty date.
HMRC stated that there was no sufficient evidence to show that Roper or someone acting his behalf asked HMRC for assistance with paying the debt.
Whilst there is no statutory definition for a “reasonable excuse” for preventing tax being paid on time, a common definition is an unexpected or uncommon event that is either unforeseeable or outside the taxpayer’s control.
In its decision, the first tier tribunal accepted that Roper was unable to work because of his illness and did not have the means to pay his tax deficits.
But the tribunal also stated that they couldn’t understand why Roper failed to implement a payment plan for his tax after filing his returns 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.
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