Kinlet Properties Limited v Commissioners for Her Majesty's Revenue and Customs

Facts

The appellant, Kinlet Properties Limited, was an employer required to file a PAYE end of year return (form P35) for the tax year 2009/10 with HMRC. The return was due by 19 May 2010 but was not delivered until 15 October 2010, when it was eventually received online, over four months late. On 27 September 2010 HMRC issued a penalty notice in the sum of £400, calculated at £100 for each month or part month of default over the period 20 May 2010 to 19 September 2010, the company having had two employees during the year. The company did not dispute that the return had been filed late. Its director admitted that he had simply forgotten to make the return, and said that he first became aware of the position, and of the fact that fines were payable, when the penalty notice arrived some nineteen weeks after the due date. The company's complaint was that HMRC should have sent a reminder far sooner than it did. The company also pointed to problems with HMRC's computer systems between 6 and 15 October 2010. The company appealed to the First-tier Tribunal (Tax Chamber) against the penalty.