Just how tough HM Revenue and Customs (HMRC) can be was illustrated by a recent case in which they imposed a penalty of £1,300 for the late filing of a tax return by a businesswoman who, as well as running her own business, was also caring for her two terminally ill parents for four years. Her father suffered from cancer at the time and her mother had had a series of strokes. Both died within months of one another during the tax year in question, following which the daughter was faced with, in her words, ‘the sorting out of everything; the house, the belongings, the estate, Dad’s financial affairs, their pensions etc.’

Her appeal against the fine was submitted late. HMRC wrote to her saying, “The only circumstance in which we can accept a late appeal is if you have a reasonable excuse for not completing the tax return on time. This reasonable excuse must be an unexpected or unusual event, either unforeseeable or beyond your control, which continued for 30 days beyond the receipt of the penalty notice.”

HMRC refused to use its discretion to remit the penalty, claiming that her circumstances were not ‘exceptional, abnormal, unusual or something out of the ordinary run of events’ and citing her ability to continue to run her business as evidence that the ‘reasonable excuse’ argument could not apply.

The woman sensibly took her case to the First-tier Tribunal (FTT), which gave HMRC short shrift. In the FTT’s view, “The appellant had to work to support herself and pay the everyday expenses of keeping her home. The fact that she did that and was able to look after her parents in the way described is remarkable.”