Those who deliberately delay filing their tax returns risk incurring severe financial penalties. However, the tax regime leaves room for mercy and, in relieving a hard-pressed restaurateur of more than £60,000 in penalties, the First-tier Tribunal (FTT) took account of her caring responsibilities for a succession of sick and elderly relatives.

The woman managed an extensive family restaurant business. She explained her delay in filing her returns in respect of two tax years by the fact that she was at the relevant time primary carer for her father and parents-in-law, all of whom had since died. She also said that, whilst running the business hands on, she left financial matters in the hands of her husband and their accountant.

In dismissing her appeal against automatic and late-filing penalties amounting to £15,700, the FTT noted that she bore personal responsibility for filing the returns on time. Her reliance on others to deal with her financial affairs did not amount to a reasonable excuse for her failure to do so.

However, in upholding her challenge to further penalties totalling £60,243, the FTT found that HM Revenue and Customs had failed to show that the filing delays were deliberate. When under pressure due to her caring and business responsibilities, it was unsurprising that she left tax compliance matters to others. She gave penalty letters to her husband to deal with and was angry when she discovered that filing deadlines had been missed.