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Special circumstances
Special circumstances
Mr Gordon accepted that the FTT’s power to reduce a penalty by reason of special circumstances was slightly different from its powers in the other two cases described above.
In the case of an appeal against a penalty in respect of a failure to notify, the FTT had the power:
to cancel the penalty if the failure was not deliberate and it considered that the taxpayer had a reasonable excuse for the failure; or
to substitute for the Respondents’ decision another decision that the Respondents had the power to make if it considered that the Respondents had imposed too high a penalty for one of the reasons articulated in paragraphs 134 to 142 above.
However, if it considered that there were special circumstances, the FTT was obliged to use the same percentage reduction as the Respondents had used in respect of the special circumstances unless the FTT considered that the Respondents’ decision in relation to special circumstances was flawed. In this case, since the Respondents had not made any reduction for special circumstances, we could make such a reduction only if the Respondents’ decision in that regard was flawed.
Mr Gordon said that, although it was dealing with different penalty legislation, the UT decision in Edwards v The Commissioners for Her Majesty’s Revenue and Customs [2019] STC 131 (TCC) at paragraphs [72] and [73] made it clear that the phrase “special circumstances” should not be given a narrow meaning. In those paragraphs, the UT had referred with approval to the dicta of Judge Vos in Advanced Scaffolding (Bristol) Limited v The Commissioners for Her Majesty’s Revenue and Customs [2018] UKFTT 744 (TC) at paragraphs [99] to [102] (“Advanced Scaffolding”) to the same effect. Later in his decision in Advanced Scaffolding, at paragraph [225], Judge Vos had said as follows:
“The right approach for the Tribunal is to look at all the relevant circumstances and consider whether, in the particular case in question those circumstances are special. I see no reason to limit this to circumstances which ... operate on the particular taxpayer in question as opposed to those which could affect a larger number of taxpayers. It is up to HMRC or, where relevant, the Tribunal to decide based on all of the facts of the particular case whether the circumstances in question are, in that case, special.”
- Heading
- Introduction
- The FTT Decision
- The UT Decision
- Introduction to the issues
- issue one – the principal private residence exemption
- The legislation
- dwelling–house as his only or main residence
- where the accommodation is provided for the better performance of the duties of the employment, and it is one of the
- No part of a gain to which section 222 applies shall be a chargeable gain if the dwelling–house or part of a dwelling–house has been the individual's
- “The application of section 222(8) is to be determined by the FTT in relation to all four
- The reconsideration shall be on the basis of the findings of primary fact made in the
- Findings of fact in the FTT Decision
- The documentary evidence
- The medical evidence
- The contract of employment
- The Appellant’s email
- The photographs
- The Appellant’s evidence
- Mrs Campbell’s evidence
- Officer Weir’s evidence
- Our impression of the witnesses
- Our findings of fact
- we have reached the following relevant findings of fact for the purposes of this decision
- Was it necessary for the Appellant to stay in his parent’s home in order to provide care to his father
- The Appellant’s intention to occupy
- Concluding comments in relation to our findings of fact
- Discussion
- By reason of employment
- “There are many decisions on the meaning of “by reason of employment” including in particular Wicks v Firth 56 TC 318. In John Charman v HMRC [2021] EWCA Civ 1804 (“ Charman ”) the Court of Appeal sai
- There was little, if any, dispute between the parties as to the correct test to be applied to determine whether an interest is acquired “by reason of” employment. It is not necessary for HMRC to show
- In Charman , The Court of Appeal emphasised that the FTT’s evaluation of this issue can only be challenged on appeal on limited grounds, at [46]
- There are numerous other authorities to the same effect On 25 October 2023, the Supreme Court released its decision in HMRC v Vermilion
- “If one approaches the question by asking, as suggested by Oliver LJ in Wicks v Firth , what it was that enabled Mr Campbell to enjoy the ability to reside in the family home, we do consider that the
- Necessary for the performance of the duties of the employment
- The Intention Condition
- Conclusion
- issue two – the penalties
- The legislation
- The terms of the remittance
- “ We instruct the FTT to determine, by way of oral hearing (either in person or remote)
- The reconsideration shall be on the basis of the findings of primary fact made in the
- Findings of fact in the FTT Decision
- The evidence
- The correspondence
- The explanation of the Penalties
- The witness evidence
- Our findings of fact
- Discussion
- Reasonable excuse
- – see the UT decision in Perrin v The Commissioners for Her Majesty’s Revenue and Customs [2018] UKUT 156 (TCC) (“ Perrin ”) at paragraphs [81] to [83]
- Special circumstances
- Conclusions