< Go Back HMRC Roundly Criticised in Special Relief Case Posted: Sep 9, 2015HMRC has been heavily criticised for its treatment of a dyslexic painter and decorator who had genuine difficulty in dealing with his tax affairs and HMRC in general.
The
Revenue alleged that John Clark, from Dunfermline, Scotland, who had a number of personal issues including depression, owed tax of some £17,779. This was a total of three
estimated 'determinations' raised by HMRC for the years 2002/03 to
2005/06. The figures were not based on his actual business records or accounts. A firm of accountants who acted for Clark from April 2013, calculated
there was, in reality, no tax due as his income was less than his personal
allowance for those years.
Clark had worked part time as painter
and decorator for about one year and then stopped when he split from his
wife in 2003 after which he was the sole carer for his school-age
daughter. His wife died in 2013. She helped him with his tax affairs until about March 2003. In 2006 a fire at Clark's house caused extensive damage. He could
not live there for almost a year. His daughter left the house
in 2009.
Clark said that he had no recollection of receiving tax
returns or tax demands and that he would not have appreciated the
significance of such documents. Clark is dyslexic. He had no
representation at the tribunal and had to have all the documents read out to him.
With
his daughter’s help Clark wrote to HMRC in June 2011. There was no
reply. The letter was returned, marked “sent to wrong department.” Clark
also met with HMRC three times but no progress was made. He was unable to communicate satisfactorily with their
staff and they had not appreciated his personal difficulties which made communication with them so hard for Mr Clark.
The case, John Clark v HMRC (TC04509), focussed on whether HMRC should have granted Special Relief in respect of
the previously estimated (determined) tax, and whether HMRC's pursuit of the estimated taxes was
"unconscionable" considering this taxpayer's particular circumstances.
The
tribunal judge, Kenneth Mure, ruled that HMRC's pursuit of the tax debt
was indeed "unconscionable" and cited a previous 2013 tribunal - William Maxwell v
HMRC as a factor in his decision. He said that
HMRC didn't seem to consider Clark's severe learning difficulties, his
reliance on his family and the likelihood that many tax documents may
have been destroyed by his house fire. HMRC's argument was, he said, "too
narrow, inadequate, and lacking in consideration of the appellant’s
peculiar vulnerability,". He went on to affirm that HMRC simply ignored Clark's "inability to
engage fully and satisfactorily with the tax authorities."
Whilst this case does have a number of unique figures it does highlight how HMRC can steamroller those who are ill equipped or unable to find their way through the dense jungle of tax legislation, HMRC guidance and all those forms and papers! If you have been pursued for taxes estimated by HMRC you may wish to look at this case and Special Relief in general. Contact us if you need any assistance.
