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Deliberately stupid? A pair of taxpayers were recently accused by HMRC of deliberately submitting tax returns they knew to be wrong, or suspected to be wrong and then deliberately didn’t check (in case they were wrong). The taxpayers had been sold a scheme that didn’t, in the event, work. But HMRC was asking the tribunal to believe that they paid fees for this shonky scheme, knowing that it would fail. Or, that they paid fees strongly suspecting that the scheme didn’t work and wilfully chose not to find out if it worked or not. Both of those alternatives would be highly irrational, not deliberate. It may be relevant that HMRC was behind with its assessments and needed to prove deliberate behaviour in order to bring them into date.
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Slow processing There was a glitch when the high income child benefit charge (HICBC) was introduced: HMRC only had the power to issue late assessments where “income” had not been assessed; but the HICBC was not “income”. This was resolved by legislation rewording HMRC’s right to assess but a cut-off date was established: those who had appealed before the cut-off date could not be subjected to the new rules. In a recent case it was shown that the taxpayer would have benefited from this deadline had HMRC not delayed processing his appeal until after the cut-off date. The tribunal has asked HMRC in the strongest possible pleading terms to exercise its discretion to withdraw the assessment. However, if HMRC does so it risks a flood of appeals from other taxpayers whose cases were delayed by HMRC (it is not known whether these delays were deliberate, by the way). Unfortunately, HMRC is unlikely to publicise the outcome whichever decision it makes.
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Tribunal decisions may slow to a dribble Until a recent change in the law, the First-tier Tribunal was supposed to issue a written decision within 28 days. However, that deadline has now been extended to “as soon as reasonably practicable”. This, presumably, will allow the tribunals to spend more time hearing cases but that will prove to be a double-whammy for decisions: if more time is spent hearing cases, where will the time for issuing decisions be found? On top of that, if more cases are being heard, there will be more decisions to issue, with less time to write them. It may not be “reasonably practicable” to issue any decisions at all under the new arrangements, which could mean the pace of the appeal process (already slow) will become glacial.
