Pub Owner's ￡700k Late Penalty Appeal Dismissed

A pub owner recently lost a late appeal against a substantial penalty payment to HMRC for unpaid taxes. The appeal, dismissed by the First Tier Tribunal (FTT), highlights the importance of timely tax compliance and communication with tax authorities.

Background of the Case

The pub in question, sold in 2012 for ￡1 million, was involved in a tax dispute regarding corporation tax gains. Additionally, a car park attached to the property was sold in 2015 for ￡1.1 million. The pub owner was also liable for VAT on car parking fees collected between 2009 and 2015. The penalties assessed included:

• Corporation Tax Penalty: ￡371,119.03
• VAT Penalty: ￡113,749.54
• Civil Evasion Penalty for Land Disposal: ￡211,743

These penalties, totalling ￡696,611, brought the overall amount owed to ￡1,464,720.

HMRCs Actions

HMRC initiated contact in 2018 with an information notice after opening an enquiry into the company’s 2015 tax return. By April 2019, HMRC had issued penalty assessments following previous attempts to communicate.

Despite multiple attempts by HMRC to arrange meetings and provide guidance, the pub owner failed to respond adequately. Claims were made that communications were sent to HMRC, but there was no evidence to support this.

The Appeal and Tribunal Findings

The pub owner officially appealed the penalties in January 2023, over three years late. The late appeal was attributed to health issues and a misunderstanding about the operation of HMRC during the COVID-19 lockdown.

The tribunal, however, found no evidence to support the pub owner’s claims of communication with HMRC. The judge noted that the owner’s actions were deliberate, and there was no valid challenge to the assessments.

Conclusion

The tribunal dismissed the appeal due to conflicting evidence and lack of timely action. This case serves as a crucial reminder for businesses to maintain clear communication with tax authorities and to address tax obligations promptly to avoid severe penalties.

For more details on this case and the importance of timely tax compliance, visit our website for more property-tax-related news and articles.