The taxpayer, as the representative partner, appealed against the issue of two first and two second fixed late filing penalties notices of £100 each in respect of the 2008 partnership return. The return was not received until 26 August 2009. HMRC's case was that a partnership return for 2008 had been issued on 6 April 2008 but the taxpayer denied having received it. In the appeal notice it was stated that she had not received any forms to enable the partners to complete the 2008 return.

Dismissing the appeal, the First-tier Tribunal found from the evidence that, on the balance of probabilities, the partnership return did arrive at the taxpayer's address in April 2008. By the time the taxpayer received a penalty notice in February it should have been obvious that any impression she had gleaned from HMRC that no partnership return was required was incorrect. This would have been even more obvious from subsequent communications. The tribunal did not accept she had a reasonable excuse for not filing on the grounds that she was waiting for the form to be sent to her. There was no evidence of active steps on her behalf to obtain the form especially in her initial appeal letter of 16 March.

Thus, whilst the tribunal may have been prepared to accept there was a reasonable excuse for the default covering the period up to mid February, it was not satisfied that the excuse persisted until the return was filed in August.

One might assume from this that it would thus be possible to set aside the first penalty on the basis of the short term reasonable excuse. However that did not accord with the wording of section 93A. Therefore it was necessary for the reasonable excuse to persist for the whole of the default period and therefore both penalties stood.

The full text of the judgment is available at http://www.bailii.org/uk/cases/UKFTT/TC/2010/TC00597.html