Spc00724

PENALTY DETERMINATION – Failure to comply with section 20 Notice to produce copy tax return – TMA 1970 s.98(1)(b(i), 100C - £300 penalty determined

THE SPECIAL COMMISSIONERS

	THE COMMISSIONERS FOR HER MAJESTY’S REVENUE & CUSTOMS 	 Applicant

-	and  –

                                                           MICHAEL IAN WILSON                           Defendant

				Special Commissioner:  THEODORE WALLACE

Sitting in public in London on 17 November 2008

Nicholas Branigan, of Special Civil Investigations, for the Applicant; the Defendant did not appear 

© CROWN COPYRIGHT 2008

DECISION

1.	This was a summons for a penalty under section 98(1)(b)(i) of the Taxes Management Act 1970 for failure to comply with a notice under section 20 dated 27 September 2008 requiring the Defendant to deliver a copy of his tax return for 2004/05 not later than 27 October 2008.

2.	The summons was issued under section 100C following the laying of an information by Mr Branigan.

3.	The Revenue failed to open an enquiry into the 2004/05 within the time allowed by section 9A(2).  They are unable to locate the copy of the 2004/05 originally submitted and wish to determine what was disclosed in relation to a loss of £2 million claimed for capital gains tax purposes on the redemption of Capital Redemption Bonds in that year.  The figures from the return were extracted and entered manually on the computer but the additional comments box was not copied.

4.	The Tribunal has received no communication from the Appellant whether in response to the hearing notice or otherwise.

5.	Mr Branigan drew my attention to a letter from Goldwins, chartered accountants, dated 3 March 2008 referring to section 20 and contending that the tax return is not relevant to the liability or the amount of liability which exist independently of the return.

6.	I accept Mr Branigan’s submission that a return contains “information relevant to – (i) any tax liability to which [the Defendant] is or may be subject” so that the notice was intra vires. He told me that the return was needed so as to decide whether there are grounds for an extended time limit assessment based on neglect.

7.	I do not consider that the fact that the Revenue received the original return which they cannot locate prevents them from requiring a copy.

8.	Mr Branigan asked for the maximum penalty of £300.  He said that the Appellant had given no reason for his non-attendance.

9.	Although the statutory penalty is “not exceeding £300”, that amount has been unchanged since 1989 so that in real terms the maximum is around half of what it was in 1989.

10.	The maximum penalty is very small compared with the loss which is potentially in issue.  Furthermore the default has continued for a year without any explanation apart from Goldwins’ letter in March 2008.  Compliance should involve no difficulty.  I determine the penalty in the sum of £300.

THEODORE WALLACE
SPECIAL COMMISSIONER

RELEASED: 3 December 2008

SC 2036/2008