The First-Tier Tribunal (Tax Chamber) has dismissed a late appeal by Aaron Treliving against HMRC's tax assessments and penalties related to the Higher Income Child Benefit Charge (HICBC). The case, heard remotely on June 28, 2024, and adjudicated by Tribunal Judge Amanda Brown, underscores the stringent standards applied to late tax appeals and the high bar for what constitutes a "reasonable excuse."
Case Background
Aaron Treliving, a chartered surveyor and business director, found himself at odds with HMRC over tax assessments for the years 2014/15 to 2019/20. The assessments, issued on April 7, 2021, were a result of Treliving's failure to declare income as required under the HICBC. In addition to the tax owed, HMRC levied penalties, notified on April 11, 2021. However, Treliving did not submit an appeal against these assessments until January 28, 2022—nearly ten months after the statutory deadline, prompting HMRC to reject the appeal as being out of time.
On July 20, 2023, Treliving applied to the Tribunal for permission to submit his late appeal, arguing that personal circumstances had prevented him from meeting the original deadline.
Legal Framework
Under Section 49 of the Taxes Management Act 1970, taxpayers are required to notify HMRC of their intention to appeal within 30 days of receiving a tax assessment. However, a late appeal may be accepted if the taxpayer can demonstrate a reasonable excuse for the delay and if the appeal is lodged without unreasonable delay after the excuse has ceased.
The Tribunal's role in this case was to assess whether Treliving's reasons for the late appeal met the criteria of a "reasonable excuse" and whether the delay in filing was justified.
Evidence Presented
The evidence before the Tribunal included extensive correspondence between HMRC and Treliving, telephone records, and Treliving's own testimony. Notably, Treliving acknowledged receiving some letters from HMRC, although he claimed that personal and family circumstances had prevented him from responding in a timely manner.
Key points of evidence included:
Awareness of HICBC: Treliving was aware of the HICBC requirements. He had previously opted not to claim child benefits for his second child, born in 2013, due to awareness of the charge, while continuing to claim for his first child, born in 2011.
Receipt of Correspondence: Despite Treliving's claims of not receiving or reading HMRC’s assessment letters, the Tribunal found it more likely than not that he had received some, if not all, of the correspondence. This conclusion was supported by a telephone record from December 2021, where Treliving acknowledged receiving letters and payment demands.
Delay in Appeal: Even after becoming aware of the assessments and the need to appeal, Treliving delayed action for several months, without a satisfactory explanation for this prolonged inaction.
Tribunal's Discussion
The Tribunal's analysis focused on three primary excuses offered by Treliving:
Lack of Awareness of the Appeal Requirement:
Treliving argued that he was unaware of the need to appeal within 30 days, claiming that he either did not receive or did not read the relevant HMRC letters.
The Tribunal rejected this argument, noting that all correspondence was sent to Treliving’s correct address and that he had acknowledged receiving some letters. The Tribunal emphasized that failure to read official correspondence does not absolve a taxpayer of their legal obligations, particularly when such obligations are clearly stated.
Difficult Pregnancy of Treliving’s Wife:
Treliving cited his wife’s difficult pregnancy, which included high-risk factors and required significant attention, as a reason for his delayed response.
The Tribunal was sympathetic to the challenges posed by the pregnancy but found that this excuse only applied up to the birth of their child in August 2021. After this period, Treliving continued to delay his appeal by several months. The Tribunal noted that while the pregnancy could have justified some delay, it did not explain the entire period of inaction, particularly after August 2021.
Life Circumstances:
Treliving also claimed that the general pressures of life, including his responsibilities as a father and business director, contributed to the delay.
The Tribunal was unequivocal in dismissing this argument, stating that life challenges do not constitute a reasonable excuse for neglecting tax obligations. The Tribunal highlighted that many individuals face similar life pressures but still manage to comply with their legal responsibilities. As a business professional with a strong educational background, Treliving was expected to manage his tax affairs despite personal difficulties.
Conclusion
In its ruling, the Tribunal concluded that Treliving did not have a reasonable excuse for his late appeal. The Tribunal emphasised that even if the pregnancy had been accepted as a temporary reasonable excuse, the failure to act within a reasonable time after the birth of the child was unjustifiable. As a result, Treliving's application to submit a late appeal was dismissed.
Right to Appeal
Treliving retains the right to apply for permission to appeal this decision. According to Tribunal rules, any such application must be submitted within 56 days of the decision notice.
Implications
This ruling serves as a clear reminder of the importance of adhering to statutory deadlines in tax matters. The Tribunal's decision reinforces that taxpayers must prioritise their legal obligations and that excuses related to personal circumstances will be closely scrutinised and often found insufficient. The case also underscores the need for taxpayers to remain vigilant in managing their tax affairs, particularly when it comes to understanding and responding to HMRC's communications.
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