VAT penalties
Posted on 02 Nov 2022
Judge rules that HMRC is making illegal online filing demands
There is a lot of concern that a number of HMRC"s "mandatory" requirements for online tax return filing do not have the force of law. A recent tax tribunal decision on a £100 VAT return penalty adds a new dimension to this controversial area say Harris & Co chartered accountants Northampton.
In the recent case of Neil Garrod and the Commissioners for Her Majesty’s Revenue and Customs, TC04537, Appeal number: TC/2014/35360 the judge ruled that the trader behaved reasonably in refusing to tick the terms and conditions box when “faced with an unlawful attempt by HMRC to impose unlawful terms and conditions on him”.
Mr Garrod was prepared to use the internet to submit his returns online.
However, to do so, HMRC required him first to sign up to the “Government Gateway” which required him to tick a box stating that he had read HMRC’s terms and conditions for online filing. These terms and conditions run to the equivalent of 12½ A4 pages. Mr Garrod refused to agree to these terms.
Judge Mosedale decided that, while the tick box precondition was a condition for filing online, it was not actually a part of the VAT online return form. She further found that neither the form of the online VAT return nor the tick box precondition were authorised by statute.
In the recent case of Neil Garrod and the Commissioners for Her Majesty’s Revenue and Customs, TC04537, Appeal number: TC/2014/35360 the judge ruled that the trader behaved reasonably in refusing to tick the terms and conditions box when “faced with an unlawful attempt by HMRC to impose unlawful terms and conditions on him”.
Mr Garrod was required to submit VAT returns. He failed to submit an electronic VAT return by the due date but did submit it by paper. After some correspondence, HMRC imposed a £100 penalty on him for failure to make an online return.
Mr Garrod was prepared to use the internet to submit his returns online.
However, to do so, HMRC required him first to sign up to the “Government Gateway” which required him to tick a box stating that he had read HMRC’s terms and conditions for online filing. These terms and conditions run to the equivalent of 12½ A4 pages. Mr Garrod refused to agree to these terms.
Judge Mosedale decided that, while the tick box precondition was a condition for filing online, it was not actually a part of the VAT online return form. She further found that neither the form of the online VAT return nor the tick box precondition were authorised by statute.
