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The Tribunal determined the appeal on 12 August 2010 without a hearing under the provisions of Rule 26 of the Tribunal Procedure (First-tier Tribunal)(Tax Chamber) Rules 2009 (default paper cases) having first read the Notice of Appeal dated 7 May 2010, HMRC�s Statement of Case submitted on 22 June 2010 and the Appellant�s submissions contained within previous correspondence
This is an appeal against the imposition of 244 penalties imposed for the late submission of monthly construction industry scheme (�CIS�) contractor returns for the periods ending 5 October 2007 to 5 November 2009 inclusive totalling �27,000.
HMRC accept in the Statement of Case that the Appellant�s contractor activity did not start until 6 October 2007 and accordingly cancelled the penalties initially imposed for the period ending 5 October 2007, which leaves 244 outstanding penalties against which the Appellant appeals. The Statement of Case highlights the fact that some penalties have been undercharged, however HMRC do not intend to pursue the additional sums as the undercharging arose as a result of HMRC�s internal system.
The Tribunal had the benefit of correspondence passing between the Appellant�s agent to HMRC dated 11 December 2009 in which the agent explained that the Appellant did not receive any CIS Monthly Returns until September and October 2009 after the Appellant�s visit to the tax office at Norwich and following receipt of the penalty notices. The Appellant�s agent expressed concern that HMRC did not notify the Appellant for almost 2 years that returns were outstanding, during which period the amount of the penalties was increasing. It was also highlighted that no tax is outstanding.
The Tribunal carefully considered all of the written submissions made by and on behalf of the Appellant. The Tribunal found that, although the Appellant is now operating the CIS scheme correctly and although the potential consequences of the penalties are severe, the effect of the penalties is not sufficient to amount to reasonable excuse for the significant delay in submitting the returns.
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