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Tax tribunal finds in favour of trustee

12 April 2013. Published by Adam Craggs, Partner

The recent case of The Trustee of the De Britton Settlement v HMRC [2013] UKFTT 106 (TC), illustrates the importance of evidence and proper preparation in tax appeals before the First-tier Tribunal ('FTT').

The facts

By virtue of section 8A(1B) Taxes Management Act 1970 ('TMA'), the trustee of the De Britton Settlement was required to deliver a tax return by 31 October 201, for the year 2010/11. HMRC claimed that the trustee's return for 2010/11 was not filed by this date and that as the trustee had no reasonable excuse for this failure, a penalty was due.

The trustee appealed against the penalty which had been assessed by HMRC under Schedule 55, Finance Act 2009, and the appeal came before the FTT for determination.

The arguments

The trustee's position was that the return was posted, in good time for it to be received by HMRC by 31 October 2011. The trustee's agent confirmed to the FTT that he visited the trustee on 24 October 2011 to review and sign the return and it would have been posted on 26 October 2011. He provided the FTT with a copy of his diary as confirmation of the position.

HMRC failed to produce any evidence to show that the return had not been so delivered and it would appear that they simply asserted that the return had been delivered out of time.

The FTT's decision

The FTT allowed the trustee's appeal.

The FTT accepted the evidence relied upon by the trustee and found, as a fact, that the return was posted on 26 October 2011. The FTT thought it likely that the letter would have been stamped with a first class stamp and as a result of the deeming provisions contained in section 7 Interpretation Act 1978, the return would 'in the ordinary course of post' be delivered the following day. As a result, the return must, unless the contrary is proved, be treated as received on 28 October 2011.

The FTT commented that HMRC had failed to provide evidence of any officer with personal experience of the system used in relation to the receipt of such returns, no date stamped letter was produced, no log of receipts was produced and there was no statement from the supervisor of the HMRC receiving office.

The FTT said at para 16:

'Given that the grounds of appeal raised clearly a contention that the return had been received on time, the failure to address that issue cannot weigh in HMRC's favour in addressing the question of whether the return was in fact received on time. Nor can their failure to respond to the Appellant's evidence of posting.'


It is surprising that given HMRC were claiming late receipt of a return they did not feel the need to provide the FTT with any evidence of the date of delivery of the return. It is not surprising that in the absence of such evidence, the FTT found in favour of the trustee and allowed the appeal. HMRC frequently assert that returns have either been received late, or indeed never received. This case is a timely reminder that in such cases it is not sufficient for HMRC to simply make assertions. Where the taxpayer has produced evidence in support of his case which is not accepted by HMRC, it is incumbent upon HMRC to provide cogent evidence to the contrary, otherwise they can expect to continue to lose such cases.