Taxation this week carries an interesting article on a recent tax case, SKG (London) Ltd (TC282).
http://www.taxation.co.uk/taxation/articles/2010/01/12/19804/disproportionate-penalty
The company was unaware of the requirement to operate CIS – it previously had done its own accounts, but then, as it got bigger, it took on an accountant who identified that CIS hadn’t been operated, and corrected this.
HMRC levied fixed penalties for late registration, £2,800.
The appeal to the First Tier Tribunal concerned the proportionality of these penalties and human rights issues, given there was no tax loss.
The tribunal ordered the case be reheard.
So, although its not definitive, it shows there are grounds for challanging the proportionality of fixed penalties.