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A taxpayer tried to make a late appeal against a personal liability notice (PLN). HMRC had imposed this penalty on a company called Kronstadt Constructors, where the taxpayer was a director because there was a deliberate mistake in its VAT return.
The main question in this appeal was whether the late appeal should be allowed. The taxpayer claimed he was never told about the PLN, so he argued that his time to appeal never began. Also, he insisted that since he needs help understanding English, the notice should have met the standards of Article 6(3)(a) of the European Convention on Human Rights.
The First-tier Tribunal, however, cast doubt on the taxpayer’s claim of not understanding English. The tribunal found it peculiar that an individual with such language proficiency, including Moldavian, Romanian, and Russian, would reside in the UK for over 12 years and manage a business without attempting to learn English. This underscores the tribunal’s role in evaluating such claims and challenging them when necessary.
The judge said anyone facing a tax penalty must have HMRC’s claims explained in a language they understand. But HMRC can assume people understand English only if told otherwise. If the taxpayer needs another language, he must inform HMRC, especially if he has professional help. If he never asked for a translation, HMRC can rely on English documents. The taxpayer’s company even filed English statutory accounts, quarterly VAT returns, and corporation tax returns without telling HMRC he struggled with English, so HMRC had no reason to think otherwise.
The tribunal decided the PLN in English did not break human rights rules. There was no sign it was misaddressed, and he gave no good reason for his late appeal. So, permission for the late appeal was denied.
Commenting on similar issues, our expert noted that big hurdles exist before a property-based business can qualify for Business Property Relief (BPR). Observers might think more was done than just managing an investment. However, courts now suggest that if it is different from a hotel, it often needs to catch up to BPR standards.
Frequently asked questions (FAQs)
Why was the appeal denied?
Because the tribunal found no evidence that he was not notified in English, and he never requested help in another language, there was no reason to allow a late appeal.
What if someone truly cannot understand the language?
Then they must clearly tell the authorities as soon as possible, providing details of their language needs. Without this, the system assumes they understand English and proceeds accordingly, possibly causing misunderstandings.
How does this affect others in similar situations?
Others facing similar issues must understand that silence can lead to wrong assumptions. If nobody is informed, the process remains unchanged. Clear and open communication is crucial to ensure fairness and correct decisions every time. This emphasis on communication should reassure you and give you confidence in the process.
Are there ways to reduce confusion?
Yes, being proactive is key. Clearly stating language requirements and addressing misunderstandings early on can prevent delays. However, it is equally important to provide correct details from the start. This ensures a smoother process and leads to more accurate outcomes. Taking responsibility for providing correct details from the start is a proactive step that can make the process smoother for everyone involved.
If you need help to plan your taxes, please contact Tax Accountant at 0800 135 7323 or email info@taxaccountant.co.uk for expert advice.