Illness is a reasonable excuse

Mr Atkinson was a sole trader running a franchised carpet cleaning business. Towards the end of 2008 his business went through a bad patch, with turnover falling from around £30,000 to £4,000 a month.  He started drinking heavily.  He couldn’t meet his liabilities, despite re-mortgaging his home.  He was also suffering from ulcers. In November 2009, he asked his brother, who lived some distance away, for help.
His brother found unopened mail that included a demand for outstanding tax. He contacted the taxman and eventually managed to arrange a time-to-pay agreement.

The brother appealed, on behalf of Mr Atkinson, against the surcharge for late payment of tax, on the basis that his brother had suffered a serious illness during the appeal window.  HMRC carried out an Internal Review, but still refused the claim.

The appeal went to the First-Tier Tribunal (FTT).  The tax tribunal said that it would have been ‘preferable if there were medical evidence in this case’ but nevertheless took account of the brother’s evidence relating to Mr Atkinson’s health and also the competence with which he acted on his brother’s behalf. They also noted that Mr Atkinson previously had a good record of tax compliance.  The tribunal said HMRC had shown a lack of understanding of the stress Mr Atkinson was suffering from. The tribunal concluded that the taxpayer’s illness was a reasonable excuse and his appeal was allowed.

HMRC’s new Internal Review can be a very useful mechanism when you feel that an officer of HMRC has made a wrong decision.  But this case shows that the Internal Review teams get it wrong too and that making an appeal to the Tax Tribunal can be straightforward and very worthwhile.

Do I need specialist help with my tax appeal?
The taxman uses specialist ‘Appeals’ teams to lead its cases at Tribunal.  Lynam Tax Dispute Experts have decades of experience in handling contentious tax appeals and can assist taxpayers and their accountants with the process; in order to achieve the optimum results.
*If you need help with a tax appeal call Paul Lynam now, for a confidential and no obligation discussion on: 0845 643 9997.