JAG Interiors Ltd v Revenue & Customs

Sitting in public at Portal House, 27 Southway, Colchester, Essex on 2 June 2014

This appeal is against late filing penalties totalling �3,600 imposed for the late submission of P35 end of year returns for the years 2009-10, 2010-11 and 2011-12.� The due date for the returns was 19 May in each year, but they were not received until 24 June 2013.� The issue in the appeal is whether the taxpayer had reasonable excuse for the lateness of the returns. In addition to the usual documentary evidence, we received oral evidence from Mr Bronislaw Jagniaszek, the Managing Director of the appellant company.

The appeal was submitted late.� HMRC did not oppose the late appeal and we gave leave for it to be admitted.

Mr Jagniaszek had mentioned in a letter to the Revenue on 3 November 2010 that he was about to be admitted to hospital for heart surgery.� This was at about the midway point between the due dates for the returns of 15 May 2010 and 15 May 2011, and the company records show that there were two other directors in office at this period.

Mr Jagniaszek had earlier indicated in connection with the appeal that he had supposed the returns for the three years to have been filed by his accountant.� At the hearing, Mr Jagniaszek repeated this claim, but on reflection he conceded that he knew that the returns had not been filed.� In any event, it was submitted for the taxpayer that the penalties totalling �3,600 were out of proportion to the tax of �334 finally found to be payable for the periods.� Mr Jagniaszek estimated the turnover of the business at this time at about �1,000,000, but it was not showing an overall profit.