Tax Case: Poor Online Service
The taxpayer, Louise Fernandez, tried to file her tax return online in January 2010 but experienced poor online service as she found that she could not access the website. She contacted HMRCs support line but did not receive a reply. She eventually submitted a paper return in December 2010. HMRC issued two late filing penalties: one for not filing by 31 January and the second for still not having filed her return six months later.
HMRC claimed the taxpayer had emailed the VAT online services helpdesk in error, and the department argued it was the taxpayers responsibility to ensure her tax affairs were dealt with correctly and on time. It said the responsibility was not negated by her having sent two emails to the helpdesk. HMRC argued further that they could not reasonably be expected to reply to her emails before 31 January 2010.
The First-tier Tribunal judge said he found the latter proposition startling. He was sure HMRC would expect a business to which they had sent correspondence not only to be able to reply within 14 days but actually to do so.
He said, There is no reason why the standards applicable to businesses and commercial organisations should not also apply to an organ of the state.
The judge agreed it was the taxpayers responsibility to file her self assessment return on time, but it was equally the responsibility of HMRC to provide online filing facilities that worked and provided the promised filing facility. He was wholly unimpressed by the argument that there was no obligation on HMRC to reply to the appellants emails to its helpdesk; there is little point in there being a helpdesk if, in fact, it does not provide help.
The taxpayer was entitled to have expected that the requested help would arrive in time for her to be able to use the online filing facility by 31 January 2010. She therefore had a reasonable excuse for failing to file online by the 31 January 2010.
The excuse was that the online filing facility provided by HMRC did not work as it should have and, furthermore, HMRC failed to provide her with the help she had requested within a reasonable time, which, the judge suggested, should have been within three days. The first penalty was not therefore due.
With regard to the second 100 penalty, the judge said the same excuse could not possibly apply to the continued failure to file. The appellant should, in the circumstances, have taken steps to submit her return sooner than she finally did.
The taxpayers appeal against the first penalty was allowed, but her appeal against the second was disallowed.