< Go Back HMRC Fail to Evidence a Notice to File a return was issued Posted: Jan 28, 2019The Tribunal concluded that evidence presented by HMRC wasn�t enough to prove a notice to file was actually sent to the taxpayer Last year Judge Geraint Jones upheld an appeal because HMRC could not provide sufficient evidence that notices to file (a tax return) had been validly issued. The same judge has recently heard a similar case, George Pantelli (TC06929) and arrived at a similar conclusion.
Pantelli was charged penalties by HMRC for failing to file 2014/15 and 2015/16 tax returns on time. He appealed, arguing he had not received notices to file returns for those years. The evidence from HMRC consisted of a computer printout �return summary�, which suggested returns were issued on 6 April 2015 and 6 April 2016 for the two respective years.
Burden of proof In a penalties case, it is for HMRC to prove (on the civil "balance of probabilities� basis) that:
A notice to file a tax return was validly issued to the appellants most recent known address; and The taxpayer failed to submit a return by the due date specified by the notice. The Appellant, Mr Pantelli did not meet the 31 January filing deadlines because (he says) he had not received the appropriate notices requiring him to do so. As Pantelli argued he had not received any notices, it was for HMRC to prove the notices were correctly issued. HMRC didn�t have to prove Pantelli received the notices, only that the notices were issued to his most recent address in their records.
The Decision The generic date of 6 April appear will appear on almost every taxpayer�s "return summary", but that does not demonstrate that every notice was posted out on that date. �In reality HMRC sends out notices to file on a staggered basis because, logistically, it could not hand over to the Royal Mail the huge volume of letters which it would need to send if every taxpayer was sent a notice to file on the same day of each year. Nonetheless, that would have to be the factual situation for that record to be true ,� said Judge Jones.
He further observed: �The record is therefore inherently improbable and unreliable. It may well be that HMRC sends out some notices to file on 6 April in each year, but there is, literally, no reliable evidence to show that that happened in the case of this appellant on 6 April 2015 and/or 6 April 2016, or indeed on any other date �.
�Even if HMRC could show that a notice to file was intended to be sent to this appellant on each of those dates, there is no evidence to show that any such notices to file were actually sent,� he continued. �That is because even if the date shown in the return summary, whether inserted by a person or a computer, is accurate, it falls far short of evidencing and proving actual dispatch of any particular document �.
The Judge further observed that it was neither practicable or possible for an individual in a large organisation, like HMRC, to provide witness evidence that they personally placed a notice in a correctly addressed envelope, and the correct postage was paid before the envelope was submitted to the postal system. Tribunals can admit evidence which, if sufficient, could discharge the burden of proof that a notice was sent. In this case, HMRC had not offered sufficient evidence.
The penalties were cancelled, and Judge Jones commented: �whatever form the admissible evidence takes, adequate evidence is a necessity; not a luxury �.
Conclusion This case highlights the perils of failing to properly prepare a case for Tribunal, this time that failure was by HMRC. Anyone should always prepare evidence that is focussed on the point of fact or point of law being appealed. This case also emphasises that HMRC are obliged to evidence their position, just as much as any ordinary taxpayer or appellant and the same standards are being evenly applied by the Tribunal to all parties.
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