The Horseshoe Inn and Lodge Limited v Commissioners for Her Majesty's Revenue and Customs

Facts

The appellant, The Horseshoe Inn and Lodge Limited, appealed against penalties imposed by HM Revenue and Customs for the late delivery of its Corporation Tax returns for two accounting periods. Flat rate penalties of £200 were charged in respect of the accounting period ended 31 October 2007, and a flat rate penalty of £1,000 together with a tax-related penalty of £1.48 in respect of the accounting period ended 31 October 2008. The 2007 return fell due no later than 31 October 2008 but was lodged only on 6 August 2010, showing a nil Corporation Tax liability, a default of 644 days; the 2008 return fell due no later than 31 October 2009 and was likewise delivered on 6 August 2010, a default of 279 days. The appellant contended that it had a reasonable excuse arising from the intense pressure within the offices of its auditors, a two-partner practice in which the partners' wives undertook the secretarial work. Between 2007 and 2010 Mrs Ashburner died of cancer, Mrs Uppard was diagnosed with cancer and later died, and Mr Ashburner also died, leaving Mr Uppard to run the practice and serve all its clients alone. The appellant said it was incapable of submitting its own returns and was wholly dependent on the auditors. The appeal came before the First-tier Tribunal, which determined it on the papers.