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In a disappointing verdict, the Upper Tax Tribunal has overturned the sensible ruling of the Lower Tax Tribunal in Hok Limited.

The issue is a simple one: due to a oversight, Hok were late in submitting employers end of year returns.

The returns were due in by 19 May, and a £100 per month penalty accrued.

It was September before HMRC chased the company, by which time 5 x £100 = £500 had been incurred.

Originally the Lower Tribunal agreed this was unfair, and HMRC should have chased earlier, so they rescinded the penalties.

The Upper Tribunal have now ruled that the Lower Tribunal exceeded its powers, and the only option for the taxpaper was judicial review not Tribunal.

What a dishonest shambles!  HMRC and the Upper Tribunal should be ashamed of themselves. Every rule of natural justice is broken by this finding.