© 2024 by Michael Firth KC, Gray's Inn Tax Chambers
Contact: michael.firth@taxbar.com
Procedure.Tax
For additional search results use Google and enter:
site:procedure.tax [search term]
A5: Communication
General approach to notification
"[63] We do not intend to set out the analysis of the cases as that has been done by the FTT and this Tribunal in Albert House. But, in summary the key principles which can be drawn from those cases are:
(i) The starting point, as with any statutory provision, is a consideration of the terms, context and purpose of the relevant provision: HMRC v Raftaopoulou [2018] EWCA Civ 818 per David Richards LJ at [33].
(ii) Some provisions are likely to have different interpretations to others; there is no one standard interpretation that will fit all notification provisions.
(iii) There may be situations where a provision requires a particular or special formality for the giving of notice: per Lady Smith in R (Spring Salmon and Seafood Ltd) v IRC [2004] STC 444 at [32] and per David Richards LJ in Raftaopoulou at [36].
(iv) There is also a category of cases where the purpose of service of a notice can be recognised as being simply to see to it that the recipient is informed.
(v) As long as the statutory purpose has been achieved, a failure to follow the literal wording of the provision does not invalidate a notice: Hastie & Jenkerson v McMahon [1990] 1 WLR 1575 and Ralux N.v./S.a. v Spencer Mason (The Times 18 May 1989).
(vi) When considering whether the statutory purpose has been achieved it is necessary to look at the question from the perspective of the taxpayer, HMRC's intentions in giving the notice are not relevant: see R (Sword Services Ltd) v HMRC [2016] EWHC 1473 and Flaxmode Ltd v HMRC [2008] STC (SCD) 666.
(vii) The reality of a situation should be taken into account and, in cases where notification requires no particular formality, evidence of actual notice having been received or of a taxpayer being made clearly aware of the subject matter of the notification directly or indirectly, may be sufficient for notice of it to have been given, even if the notice has not been given directly to the taxpayer (Sword Services).
[64] Although none of these cases involved consideration of notices of tax penalties, and the consequences of receiving a penalty notice are not the same as, for example, receiving notice of an enquiry, we consider that they provide useful guidance in relation to interpreting notification provisions generally." (Marano v. HMRC [2023] UKUT 113 (TCC), Fancourt J and Judge Tilakapala)
​
- Notice due to communication by third party may be sufficient
​
"[65] Taking this approach, and considering Sched 55 para 18, its purpose is to ensure that once HMRC makes a penalty assessment, the taxpayer is made aware of two facts: first, that they have been so assessed and second, the period to which that assessment relates. This then enables the taxpayer to consider their position and determine how to react, including whether to appeal. There is nothing in the wording of Sched 55 para 18 or its context to indicate that any special formality is required in order for a penalty notice to be valid, provided that the notification conveys the required information.
[66] We then consider whether the statutory purpose of notification was achieved.
[67] There is no dispute as to Mr Marano's awareness of the penalty notices. As we have already mentioned, the FTT found that he was likely to have been forwarded the penalty notices and it was not disputed that his accountants had received copies and informed Mr Marano accordingly.
[68] We conclude, therefore, that Mr Marano was notified of the penalty notices (albeit partly by indirect transmission of the HMRC correspondence) within the meaning and for the purpose of Sched 55 para 18." (Marano v. HMRC [2023] UKUT 113 (TCC), Fancourt J and Judge Tilakapala)
​
However, see F3: Opening a statutory enquiry
​
Burden on HMRC to prove notice properly sent
"[18] First, the parties agree that the burden of proof in respect of the notice of enquiry issue is upon HMRC to establish that a valid notice of enquiry was given and sent and (if established) the burden passes to Mr Cattrell to establish that it was not received." (Cattrell v. HMRC [2024] UKFTT 67 (TC), Judge Chapman KC)
​
“As regards the burden of proof, it is for HMRC to establish that a Section 8 TMA compliant notice was sent in a properly addressed pre-paid envelope, to the appellant at his usual or last known place of residence…If they can establish that, then the burden of proof shifts to the appellant to show (or to prove) “the contrary".” (Wood v. HMRC [2018] UKFTT 74 (TC), §§59…60, Judge Popplewell applying Interpretation Act 1970, s.7).
“Adequate proof is a necessity; not a luxury. We do not consider that we can be, or should be, satisfied, on the balance of probabilities, that a Notice to File was posted by an officer of HMRC to the appellant simply based upon the computer held note “Return Issued Date” alongside which appears “6/4/15”. Even if the Notice to File was issued on 6 April 2015 there is, quite literally, no evidence or even any note to the effect that it was dispatched to the appellant at a specified address. That is a fundamental link in the chain upon which liability to a penalty depends. A fact that it is essential for the respondents to prove cannot be assumed. An inference of fact may well be legitimate in certain factual circumstances, but it is very clear in our jurisprudence that an inference of fact will only be drawn if it is the only reasonable inference available to the fact finding body, whether it be a judge or a jury.” (Jacks v. HMRC [2017] UKFTT 613 (TC), §13, Judge Geraint Jones QC).
Address notice sent to inferred from previous receipt of notices
“There is no indication in the document bundle of the address that was used in relation to the notice to file for 2014-15. But the return for 2013-14 was obviously received and there is nothing in the SA Notes to indicate either that an address was changed or that an “RLS” (Returned letter service”) signal was set at any time to indicate that post had not been delivered.” (Hogg v. HMRC [2017] UKFTT 538 (TC), §47, Judge Richard Thomas).
Presumption of regularity
​
“We consider, on the basis of this evidence, and the presumption of regularity, that HMRC did indeed send what they considered to be notices to file, to that address, on the dates evidenced by the return summaries. And the appellant has been unable to provide any evidence or submissions to the contrary.” (Wood v. HMRC [2018] UKFTT 74 (TC), §64, Judge Popplewell)
​
Burden on HMRC to prove decision issued and served
"I agree with Mr McDonnell that the burden of proof of both issue and service of the penalty notice falls upon HMRC." (Vekaria v. HMRC [2023] UKFTT 288 (TC), Judge Scott)
​
- Need for evidence
"[118] [The taxpayer] relies on Anstock for the proposition that HMRC must discharge the burden of proof through evidence and not through the assertions of their advocate. Whilst, of course, that is persuasive and I agree, nevertheless, I prefer to rely on the Upper Tribunal at paragraphs 51 to 55 of Edwards v HMRC (20190 UKUT 131 (TCC) (“Edwards”) where Mr Justice Nugee and Judge Herrington made it explicit that:-
(a) “An advocate’s assertions and/or submissions are not evidence, even if purportedly based upon knowledge of how any given system should operate”, and
(b) When considering whether HMRC had issued, in that case a Notice to File, in order to draw an inference that the document was “put in the post by HMRC in an envelope with postage prepaid, properly addressed to the appellant …a Court or Tribunal may only draw proper inferences … if it is more probable than not that the inference contended for is probably the only available inference that can be properly drawn”. (emphasis added)
[119] I am afraid that HMRC’s response in relation to the appellant’s submissions on the penalties was supported by very limited documentary evidence. The “audit trail” which is derived from HMRC’s computer system and purports to show HMRC’s internal processes, does not assist me. Mr McDonnell is entirely correct to state that there is no evidence on the meaning of various messages in that audit trail. Furthermore, in my view, it certainly raises questions such as item 38 which suggests that the taxpayer’s address was amended. There is no evidence in the Bundles that the taxpayer’s address was amended." (Vekaria v. HMRC [2023] UKFTT 288 (TC), Judge Scott)
​
"[12] It is also vital to remember that the Tribunal proceeds on the basis of evidence. Tribunal proceedings are judicial proceedings and although Tribunals may take a more relaxed or informal approach than some Courts, that does not undermine the essential need for facts to be proved by evidence.
[13] On behalf of the respondents Mr. James pointed to no evidence, either by way of witness evidence or documentary evidence, to indicate that the Notice upon which the penalty is based, had either been sent by the respondents and/or received by the appellant. We quite understand that in an organisation the size of the respondents’ organisation it might be difficult to lead witness evidence of the sending of each and every letter dispatched. It will be a matter for individual tribunals to decide whether evidence of system is then sufficient in any particular case and that, in turn, will depend upon the quality of that evidence and the content of it.
[14] Mr James sought to assure us that the letter had been sent, but the assertions of advocates do not amount to evidence.
[15] Accordingly, the respondents have failed to prove that it is more probable than not that the Notice was (i) sent to the appellant and/or (ii) received by him. For that reason alone this appeal must succeed." (Anstock v. HMRC [2017] UKFTT 307 (TC), Judge Geraint Jones QC)
​
- Evidence need only be adequate
"[33] As the Tribunal has remarked on other occasions, adequate evidence is not a luxury. It is a necessity.
[34] The key word here is "adequate". The question for us is not whether there could or should have been better evidence in support of the process whereby penalty notices are generated and posted. The question for us is simply whether the evidence before us is good enough - adequate - to meet the burden which the Respondent Commissioners must discharge. That is a binary question. The Commissioners' evidence is either adequate, or it is not.
[35] In Qureshi v HMRC [2018] UKFTT 115 (TC) at [14], endorsed by the Upper Tribunal in Barry Edwards v HMRC [2019] UKUT 131 (TCC) at [51], the Upper Tribunal described such evidence as "sufficiently detailed and cogent"." (Burley v. HMRC [2023] UKFTT 59 (TC), Judge McNall)
​
- Do not need to anticipate every conceivable challenge
"[148] In Rogers, the Upper Tribunal provided some guidance to the FTT for dealing with cases in which it is asserted by a taxpayer that HMRC had not given notice to file a return under section 8 TMA. In summary, the Upper Tribunal advised as follows:
(1) If HMRC fail to provide any evidence at all that a notice under section 8 TMA was served, the penalties must be set aside (Rogers [50]).
(2) If HMRC have provided some evidence that a notice under section 8 TMA was served, it is a matter for the FTT to determine whether or not that evidence satisfied HMRC's burden of proof (Rogers [51]).
(3) The Upper Tribunal then set out the following guidance that should be applied in cases where some evidence is available to the FTT (at Rogers [51]-[52]):
51. Where HMRC have given some evidence that a s8 notice was served, it will then be a matter for the FTT to determine whether that evidence is sufficiently strong to discharge HMRC's burden of proof. The FTT's assessment of the evidence should take into account the extent to which the taxpayer is disputing receiving a s8 notice. Evidence to the effect that HMRC's systems record a s8 notice as having been sent is, on its own, relatively weak evidence (since it does not itself demonstrate that a s8 notice was actually sent, and may not itself demonstrate the address to which it was sent). However, the FTT may nevertheless regard such evidence as sufficient if the taxpayer is not disputing having received a notice to file. By contrast, as the Upper Tribunal (Nugee J and Judge Herrington) identified at [56] of Barry Edwards v HMRC [2019] UKUT 131 (TCC) if the taxpayer is disputing having received a notice 2, the Tribunal is unlikely to accept weak evidence consisting only of a record that HMRC's systems record a s8 notice as having been sent to an unspecified address. In such a case, the Tribunal may look for further corroborating evidence: for example evidence that a s8 notice was actually sent to the taxpayer at the correct address or evidence that the taxpayer set about trying to submit a tax return before the deadline, from which it might be inferred that the taxpayer had received a notice requiring him or her to do so.
52. Where HMRC have adduced some evidence that a s8 notice was served, they do not need to anticipate every conceivable challenge that a taxpayer might make to the validity of such a notice and produce evidence to rebut all such potential arguments in advance. Such a requirement would be unworkable and disproportionate. Rather, where HMRC have given some evidence that a s8 notice was served, and there is no suggestion from the taxpayer that such notices are invalid, HMRC are entitled to proceed on the basis that no challenge is being made to the validity of those notices. If the FTT identifies its own concerns on the validity of a s8 notice, the proper course is for the FTT to write to the parties, before releasing its decision, to explain the nature of those concerns and to invite the parties to make submissions on the point and, if they wish, to apply for permission to adduce further evidence as necessary.
[149] In the present case, the evidence before us comprises:
(1) the print outs from HMRC's computer records, which purport to show that a notice to file a return for the tax year 2015/16 was issued;
(2) a request for evidence sent to HMRC's third-party print provider, Communisis, which records that the notice to file a tax return for 2015/16 was issued on 12 August 2016 and that the notices for the tax years 2016/17 and 2017/18 were issued by the Digital Team;
(3) the report from Communisis, which shows that the statutory notices regarding the imposition of penalties for the tax years 2015/16 and 2016/17 were issued on the relevant dates to Mr Niasse's addresses;
(4) the letters from HMRC reminding Mr Niasse to file a return - such as the letters dated 3 August 2017, 19 July 2018, 16 October 2018 and 26 March 2019 - all of which proceed on the basis that a valid notice had been given.
[150] We acknowledge the Upper Tribunal's caution (in Rogers [55]) concerning relying on the entries in HMRC's computer systems alone as evidence of service of a notice to submit a return. As in this case, that evidence tends not to show the precise date on which a return was issued. However, we consider that the weight of the evidence is sufficient to demonstrate that on the balance of probabilities the notices were issued in this case.
[151] The height of Mr Niasse's case as set out in the email from Elliotts Shah of 17 August 2021 is that Mr Niasse "may not have seen or received HMRC's communications" (our emphasis) because he was playing at other clubs at the time. It is not part of Mr Niasse's case that the notices were not sent to the correct address. Accordingly, we conclude that notices under section 8 TMA were given to Mr Niasse to make or deliver a return for each of the relevant tax years.(Niasse v. HMRC [2024] UKFTT 179 (TC), Judge Greenbank)
​
- Assertions that something would have happened not sufficient
"[36] A mere assertion of the occurrence of a relevant event in a statement of case is not sufficient: Perrin v HMRC [2018] UKUT 156 (TC) at [69]. Nor are assertions by a presenting officer or advocate that something "would have" or "should have" happened sufficient." (Burley v. HMRC [2023] UKFTT 59 (TC), Judge McNall)
​
- Evidence of system and application to individual case
"[37] Documents on their own without a supporting witness statement may be sufficient to prove relevant facts: Qureshi v HMRC at [8]; Barry Edwards v HMRC at [50].
[38] Evidence of the system in general as evidence of the application of that system in an individual case is evidence of a kind which the Tribunal has received and accepted in the past.
[39] In Qureshi, the Upper Tribunal said:
"We acknowledge that in large organisations, where many processes may be automated, a single individual may not be able to give witness evidence that he/she physically placed a notice to file into an envelope (on a specific date), correctly addressed it to a given appellant's address held on file and then sealed it in a postage pre-paid envelope before committing it to the tender care of the Royal Mail. That is why Courts and Tribunals admit evidence of system which, if sufficiently detailed and cogent, may well be sufficient to discharge the burden of proving that such a notice was sent in the ordinary course of the way in which a particular business or organisation operates its systems for the dispatch of such material".
[40] Different cases in this Tribunal have reached different outcomes:
(1) In Musca [2019] UKFTT 304 (TC) (Judge Geraint Jones KC, a case dealt with on the papers) held that there was no such "sufficiently detailed and cogent" evidence, and the appeal was allowed;
(2) In Gladman [2019] UKFTT 662 (TC), Judge Gething and Mr McBride, at a hearing, and having heard oral evidence from both sides tested in cross-examination, allowed the taxpayer's appeal on the basis that HMRC had failed to discharge their burden. There, the Revenue's officer made an extensive series of concessions in cross-examination (see Paragraph [8] of the Decision) and both the Appellant and the Revenue produced evidence which, in the Tribunal's view, was inconsistent with the Revenue having properly addressed, pre-paid and posted a letter: see Paragraph [20].
[41] In our view, the evidence here as to the production and dispatch of the penalty notices was sufficiently detailed and cogent.
[...]
[54] That is to say, we are satisfied, to the appropriate standard, that HMRC directed production of the penalty notices, that the same were produced in the ordinary course of events, and were properly addressed, pre-paid and posted." (Burley v. HMRC [2023] UKFTT 59 (TC), Judge McNall)
​
- Improbable that penalty issued on same day as penalty explanation
"[123] I simply do not understand their submission that the unsigned letter to the appellant’s agent dated 2 May 2019, which has been produced in the Bundle, establishes that the Notice was sent to the agent. (They do acknowledge that the one line letter has no salutation, does not identify the writer, has no signature and includes a spelling mistake.) They do not acknowledge that it is headed “Copy of penalty calculation summary”, says it encloses “copy of correspondence” with the appellant and that the following documentation in the Bundle is another copy of the penalty explanation.
[124] It seem illogical that the Officer would issue a penalty assessment on the same day as the penalty explanation letter giving the appellant time to respond until 29 May 2019.
[125] In summary, on the balance of probability, I do not accept that the penalty was issued on 2 May 2019. It certainly cannot be said that the only inference from the documentation is that the penalty notice was issued on 2 May 2019. On the contrary, the inference from the documentation is that the penalty notice was not issued on that date." (Vekaria v. HMRC [2023] UKFTT 288 (TC), Judge Scott)
​
- Unlikely that two letters will both go missing: suggests not sent
"[89] It has been accepted by HMRC that the Second Surcharge Notices did not leave HMRC’s building, recognising that it was inherently unlikely that two separate notices sent to both KPMG and Mr Archer would have all gone missing if they had been posted. As a result the appeal of the Second Surcharge Notices has been conceded. I agree that it is inherently unlikely that the Second Surcharge Notices left HMRC’s building, given that one set was due to go to KPMG and one set to Mr Archer and neither of them was received. I find that is sufficient basis to conclude that the Second Surcharge Notices were not issued." (Archer v. HMRC [2020] UKFTT 288 (TC), Judge Bowler)
​
Fraudulent communications by agent
Principal not regarded as making tax return he had never seen nor given authority to submit
"[70] I noted HMRC’s reliance on Clixby v Poutney [1968] EWHC 76 in which the Court held that a principal will be bound by the fraudulent conduct of an agent even if the principal was unaware of the fraud. On a closer reading, I consider that Clixby is distinguishable from the facts in this case. In Clixby, the taxpayer engaged the agent and signed the returns without checking or examining them. The Court recognised that although there was no positive decision by the taxpayer not to do his duty, there was conscious carelessness as to whether or not he was doing his duty. On my reading, the Court in Clixby recognised the distinction between a case of fraud where the taxpayer is wholly innocent and a case where it can be said that there was carelessness on the taxpayer’s part. The Court also appears to recognise that it would be an unusual case for a professional accountant to commit fraud when acting in his or her professional capacity. I agree; in such circumstances one would have to query the benefit to the accountant of doing so. In the case before me, it must be noted that Mr Robson received only a minimal amount of the repayment made by HMRC (the amount he understood to be owed by way of rebate) and on the material before me I consider it a reasonable inference to draw that the remainder paid to Cryoblast and Eco Cooling benefitted CACL...
[...]
[79] The box on the declaration was clearly completed by CACL or the return would not have been received by HMRC. However, I am satisfied that Mr Robson had not seen the return, he had not confirmed the accuracy of its contents and he had not given authority for its submission. For the reasons set out above, I rejected HMRC’s submissions that the email correspondence showed that Mr Robson knew a SATR was to be submitted on his behalf and that he authorised CLAC to do so; I am not convinced the evidence supports such a finding. I do not consider the fact that the email chain heading changes to “tax return” or the reference to an investment are sufficient when viewed against Mr Robson’s honest and credible evidence to demonstrate that Mr Robson knew a SATR would be submitted or that he authorised it.
[80] The facts of Mr Robson’s appeal are unusual and specific and as I have concluded that CACL were not authorised to act on behalf of Mr Robson, I do not accept that Clixby supports HMRC’s case to the extent submitted. While cases such as this must be rare, it appears to be an unfortunate loophole in HMRC’s system that this process was open to abuse.
[81] I concluded that CLAC was the not authorised agent of Mr Robson. That being so, the return cannot be deemed to have been submitted on behalf of Mr Robson. As s29 TMA requires the filing of a return the statutory requirements are not satisfied." (Robson v. HMRC [2023] UKFTT 226 (TC), Judge Dean)
​
Deemed notification: Interpretation Act 1978
"Where an Act authorises or requires any document to be served by post (whether the expression “serve” or the expression “give” or “send” or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.” (Interpretation Act 1978, s.7)
​
“The effect of s 98 [VATA - see below], and in our view its purpose, is to bring into play s 7 IA… The effect of s 7 IA is not to prescribe a method of achieving postal service or notification, or to preclude the possibility of valid service or notification if its provisions are not satisfied. Its effect is limited to the evidential requirements of proving such service or notification by the postal method required or authorised by the particular statute. It achieves that by deeming service or notification to be effected if a letter containing the relevant document is properly addressed, pre-paid and posted as so required or authorised. Proof of those matters is proof of service or notification, and unless the contrary is proved such service or notification is deemed to have been effected at the time at which the letter would be delivered in the ordinary course of post..” (Romasave (Property Services) Ltd v. HMRC [2015] UKUT 254 (TCC), §§31…32, Judges Berner and Falk).
​
Does not apply to EU Directives or Regulations
​
“There does not appear to be in domestic customs duty legislation such as the Customs and Excise Management Act 1979 (except in relation only to notices of seizure of goods – paragraph 2(b) Schedule 3) a provision akin to that in s 98 Value Added Tax Act 1994 or section 115 Taxes Management Act 1970 permitting service to a last known address. And as we have said, s 7 of the Interpretation Act does not stretch to affect directly effective EU Directives or Regulations. Section 1139 Companies Act 2006 does permit service on a company at its registered office, but that must mean at the registered office as it is on record at Companies House at the time of attempted service, and that was not the case here.” (Sharya UK Ltd v. HMRC [2018] UKFTT 72 (TC), §47, Judge Richard Thomas).
​
- Does not apply to EU Directives or Regulations
​
“There does not appear to be in domestic customs duty legislation such as the Customs and Excise Management Act 1979 (except in relation only to notices of seizure of goods – paragraph 2(b) Schedule 3) a provision akin to that in s 98 Value Added Tax Act 1994 or section 115 Taxes Management Act 1970 permitting service to a last known address. And as we have said, s 7 of the Interpretation Act does not stretch to affect directly effective EU Directives or Regulations. Section 1139 Companies Act 2006 does permit service on a company at its registered office, but that must mean at the registered office as it is on record at Companies House at the time of attempted service, and that was not the case here.” (Sharya UK Ltd v. HMRC [2018] UKFTT 72 (TC), §47, Judge Richard Thomas).
​
- Applied by analogy to documents not authorised or required by legislation
"[38] Under section 7 of the Interpretation Act 1978 which applies to service of documents authorised or required by legislation, "service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post".
[39] Clearly the nudge letter is not a document authorised or required by legislation. But we intend to adopt the same approach towards service set out above. It seems to us common sense. If HMRC are alleging that it was sent to the appellant and thus she was on notice that someone earning more than £50,000 was liable to the HICBC if they or their partner was claiming child benefit, they need to show that they had sent it to her. If the appellant then alleges reasonable excuse on the basis that she did not receive it, she needs to establish non-receipt." (Kajla v. HMRC [2024] UKFTT 193 (TC), Judge Popplewell)
​
- No evidence of posting
"[53] There is no dispute as to the addressing of the VAT Assessments. However, HMRC has not provided any proof that these letters were actually posted. I am, consequently, reluctant to regard section 7 of the Interpretation Act as sufficient in itself to address the Appellant’s claim to have not received the VAT Assessments." (Patel v. HMRC [2023] UKFTT 296 (TC), Judge Tilakapala)
​
See further, above, on the need for adequate evidence
​
- Last known place of residence
​
Taxpayer's responsibility to update HMRC
​
"[22] It was Mr Cohen’s responsibility to ensure that he updated HMRC as to his address. Alderton Hill was Mr Cohen’s last known place of residence as that was the last address Mr Cohen had notified to HMRC as at the date of the August Letter. There is no dispute that HMRC posted the August Letter to Alderton Hill and no dispute that it was delivered there. As such, we find that the August Letter was properly served in accordance with section 84 of the Finance Act 2003 and section 7 of the Interpretation Act 1978." (Cohen v. HMRC [2023] UKFTT 90 (TC), Judge Chapman KC)
​
Knowledge includes constructive knowledge but with, perhaps, less expectation of HMRC in terms of enquiries they should have undertaken.
​
“In our view, knowledge in this context refers to the serving party’s actual knowledge or what might be called his constructive knowledge, ie knowledge which he could have acquired exercising reasonable diligence” (Marshall v. Maggs [2006] EWCA Civ 20, §71).
​
“But in principle I think the dicta in Marshall v Maggs apply and HMRC have some responsibility for ascertaining the taxpayer’s address. When the Court of Appeal said that some due diligence would be required of the claimant, they were referring to “knowledge which he could have acquired exercising reasonable diligence”. My view is that where taxpayers are required to notify HMRC of their address, I do not think an exercise of reasonable diligence would oblige HMRC in all cases (before sending a letter) to make enquiries to find out if the taxpayer has moved. But I do think ‘reasonable diligence’ would oblige HMRC to make reasonable enquiries when they have indications that the address they have for the taxpayer is no longer current. If reasonable enquiries do not advance the situation, then they need go no further and must rely on what information they have.” (Tinkler v. HMRC [2016] UKFTT 170 (TC), §80).
​
HMRC may be on notice by virtue of documents sent by third parties:
​
“Mr Jones also suggested that the P60 was irrelevant as it was notification from his employer. However, there is nothing in s 115(2) to require the notification of the taxpayer’s address to be given by the taxpayer. It is just a question of the usual or last known [to HMRC] place of residence.” (Tinkler v. HMRC [2016] UKFTT 170 (TC), §84).
​
“A P60 issued by Rotherham United for the tax year to 5 April 2012 showed Mr Revell’s address is being at a different address in Brentwood and accordingly, HMRC’s records should have been updated to show this as Mr Revell’s last known address by the time the self-assessment return was issued. Mr Kruyer could offer no explanation at the hearing as to why this had not been done.” (Revell v. HMRC [2016] UKFTT 97 (TC)).
Different part of HMRC were aware of the new address
“HMRC say that the appellant did not notify the EORI team of their VAT number and had they done so they would have been issued with a new EORI based on the VAT number. This would have resulted in the EORI records being updated with the new address…In our view this is all irrelevant. It is clear now that the appellant informed HMRC as an entity of its new address in September 2015, but the original demand notes were issued to the old address, Cavendish.” (Sharya UK Ltd v. HMRC [2018] UKFTT 72 (TC), §§59…60).
​
- Rebutting the presumption
​
“On the other hand, the second half of s 7 IA expressly recognises that the actual state of affairs may be different from what is deemed to be the case. It admits the possibility of it being proved that, despite the requirements of s 7 IA having been met, service or notification has not in fact been effected, or not effected in the usual course of postal delivery. In the event that the intended recipient proves, according to the evidence and on the balance of probability, that he did not receive the relevant document, service or notification of it will not be deemed under s 7 IA to have been effected…” (Romasave (Property Services) Ltd v. HMRC [2015] UKUT 254 (TCC), §33, Judges Berner and Falk).
​
“Accordingly, if the addressee of the letter proves on the balance of probability that the letter was not served upon him then that matter has been proved and the section should be applied accordingly. Of course it is not enough simply to assert that someone did not receive the letter; the court will consider all evidence and make its findings by reference to the facts which are established including issues as to the credibility of witnesses.” (Calladine-Smith v. SaveOrder Ltd [2011] EWHC 2501 (Ch), §39, Morgan J).
“ 'The principle in Rossi's case ... as I understand it, is that where the principal Act makes the date of receipt of a notice crucial either for the purpose of enabling the person to whom it is addressed to take some action or for the purpose of, for example, fixing the date of valuation, section 7 of the Interpretation Act 1978 cannot operate to deem that the notice has been received when it has not in fact been received.’ …I am convinced that the Rossi principle applies in these cases, and that the date of receipt of the notice is important.” (CEC v. Medway Draughting and Technical Services Ltd [1989] STC 346 at 350…352).
​
“Taking all of this into account, I consider it is more likely than not that the notice of the penalty assessment was not served as required by s 115(2) in February 2014, as it was not addressed to a location within that subsection, and that as a result s 7 IA cannot apply to presume service. This is because HMRC’s records in the form of the SA Notes show that the NN7 address ceased to be the appellant’s “base address” in July 2012: it cannot therefore be the appellant’s last known (to HMRC) address and so the notice of assessment was not “properly” addressed. Secondly the appellant’s address in January 2015 is given as the NN6 address, 1 Wharf Barns, Welford (and I note without taking it into account that the agent’s business address is also in NN6 in the same village and that the appellant had become his client no later than July 2014) and on the balance of probabilities I find that that address was the appellant’s address within the meaning of s 115(2)(a) TMA.” (Patrick v. HMRC [2015] UKFTT 508 (TC), §63).
​
Rebuttal requires proof that the document was not delivered to the specified address (irrespective of whether the taxpayer saw it)
​
“As I have said, the Interpretation Act deems service of the notice to take place at the time it would take place in the normal course of post if the envelope was properly addressed, stamped and posted. HMRC have proved this. To rebut this presumption of effective service, the appellant must prove that that the letter was not delivered to the White House. It has failed to prove this.” (Spring Capital Ltd v. HMRC [2016] UKFTT 246 TC, §42).
​
Unlikely that two consecutive, properly addressed letters would go astray
​
“We consider it highly unlikely that the responses that the appellant claims he made to the 7 December and 19 April letters were sent to HMRC but that HMRC failed to receive them. It is conceivable that one of the responses might have gone astray, but it is highly unlikely that both would have done. It is also very surprising that no covering letter, as well as no evidence of recorded delivery, is available in respect of the response that the appellant claims was made to the 19 April letter, in sharp contrast to the copy letter dated 12 November 2010 (referred to at [10] above).” (Waheed v. HMRC [2017] UKFTT 668 (TC), §26, Judge Falk).
​
Material error required
​
“…a material error in the address to which notice of an assessment is sent means that the letter will not be properly addressed for the purpose of s 7 IA, and that in this context any error that is not de minimis will be a material error. In our view Mr Jones was right to accept, in relation to Decisions 7 and 9, that addressing notice of that decision 30 to “Griffin Wood House” instead of to “Griffins Wood House” was a de minimis error and could not prevent the notification of that decision from having been deemed under s 7 IA to have been given. 36. On the other hand, addressing notices of Decisions 2, 3 and 4 to “Ganrids Wood House” instead of to the Griffins address was in our view a material error, and a letter 35 addressed in that manner cannot be regarded as having been properly addressed for the purpose of s 7 IA. That was accepted by HMRC…” (Romasave (Property Services) Ltd v. HMRC [2015] UKUT 254 (TCC), §35, Judges Berner and Falk).
Discrepancies in HMRC's records of address
​
"[133]...We consider that the evidence provided by Mr Bracegirdle as regards the notification of the penalties carries very little weight. The computer records provided simply cite the “charged date”, as opposed to when the penalties were notified to Mr Dougan. Mr Bracegirdle sought to rely on the fact that Mr Dougan must have been aware of the penalties as he had paid them as part of the amounts due following the issue of statements of account and he had paid £105.10 as part of a £284,769.49 debt enforcement proceedings. We do not agree. The fact that a taxpayer is aware of a penalty or has paid them does not satisfy the obligation on HMRC to prove that it was properly notified.
[134] We found that Mr Dougan’s claim that he did not receive the penalties is supported by his credible and consistent evidence that he had not received notice of the penalties, plus two other factors. First, Mr Lewy has identified a number of discrepancies in HMRC’s records of Mr Dougan’s address and the absence of evidence that they were sent to the correct address. Second, while we accept that other documents, such as statements of account, have been received and actioned by Mr Dougan, we consider that given his method of dealing with demands from HMRC, he would have paid the penalties concerned as and when they were received if they had been notified. It would not be logical to pay statements of account but not small, fixed penalties.
[135] We concluded on balance of probabilities that the penalties had not been properly served and should be cancelled." (Dougan v. HMRC [2022] UKFTT 140 (TC), Judge Nicholl)
​
- Accepting taxpayer's evidence as to diligence
"[41] We now turn to receipt, and whether the appellant has established that she did not receive it. We are satisfied on the balance of probabilities that she did not.
[42] In our view the appellant was a truthful and reliable witness. We accept her oral evidence that she did not receive the nudge letter. She is clearly a bright individual who shoulders considerable responsibility in her job and appreciates the importance of analysing and responding to correspondence. We have no doubt that she adopts the same approach to her personal life. It is her submission that had she received the nudge letter, she would have responded to it either by telephone or by letter, as she did to all the other correspondence which she received from HMRC. We accept this submission. It is borne out by the evidence. It is our view that had she received the nudge letter, she would have responded to it. The fact that she did not supports her assertion that she did not receive it." (Kajla v. HMRC [2024] UKFTT 193 (TC), Judge Popplewell)
​
- Improbable that the relevant document was the only one never received​
"[67] His evidence as to non-receipt was not credible and we do not think that we can safely rely on it.
[68] He accepted that a significant volume of other post from HMRC had reached him, through the post, at home. This included post about penalties (for 2015/16, a late filing penalty issued on 7 February 2017, and daily penalties and a 6 month late filing penalty both issued on 11 August 2017).
[69] It also included post sent at, or about, the time the penalty notices were sent, including at least one, and possibly two, determination warning letter(s), both recorded on HMRC's self-assessment notes as having been sent by both post and email, dated 21 December 2018, complaining that the 2015/16 and 2016/17 self-assessment returns had not been filed, and indicating that HMRC was arranging for a Revenue Determination to be issued in respect of each year: see page 25 of the Supplementary Bundle.
[70] On 8 January 2019, HMRC's Debt Management service wrote to Mr Burley, giving him notice of warning of enforcement by taking control of goods, and enclosing a number of items. We are satisfied that letter was sent, and its attachments, were also received.
[71] Put shortly, it is simply not credible that the only HMRC correspondence not to have reached Mr Burley's home were the notices in dispute in this case.
...
[94] It was not until PWC's letter of 11 March 2020 - over a year after the penalties had been sent - that it was asserted "Having considered all of the available information, and discussed the matter with our client, there appears to be no evidence available to support HMRC's assertion that Late Payment Penalty notices for 2016/17 were issued and delivered to our client". There is no explanation as to why this point was not raised, if indeed extant, fairly and squarely, over the preceding year. It was asserted, on behalf of Mr Burley, that he had "consistently disputed having ever received Late Payment Penalties for 2016/17". That was not correct. It was, in the circumstances above, demonstrably incorrect." (Burley v. HMRC [2023] UKFTT 59 (TC), Judge McNall)
​
Rebutting the presumption does not mean that notice has not been given
​
“In any case where the requirements of s 7 IA are not met, for example if it is not proved that the letter was properly addressed or that the relevant document was posted, the effect is not to deem service or notification not to have been effected; the effect is only that service or notification cannot be deemed to have been effected. In such a case, instead of the intended recipient being required to prove, on the balance of probability, that he did not receive the document, the burden falls on the sender to prove that service or notification was indeed effected.” (Romasave (Property Services) Ltd v. HMRC [2015] UKUT 254 (TCC), Judges Berner and Falk).​
​
- Taxpayer having knowledge even if s.7 not satisfied​
"[23] In any event, Mr Cohen did in fact receive notice within time as he had received it by the time he wrote to HMRC referring to the August letter in his own letter dated 19 August 2019. We note that the obligation in paragraph 12(1) of schedule 10 to the Finance Act 2003 is to “give notice” and that section 84 of the Finance Act 2003 permits delivery and service of documents in the manner set out in that section rather than providing that documents can only be delivered and served in the manner set out. Given that Mr Cohen in fact received that notice within time, we find that HMRC’s obligation to give notice of their intention to enquire into a land transaction was fulfilled within time. Even if we were wrong to treat the August Letter as having been properly served pursuant to section 84 of the Finance Act 2003 and section 7 of the Interpretation Act 1978, we find that notice was properly given within time by virtue of Mr Cohen in fact receiving it within time." (Cohen v. HMRC [2023] UKFTT 90 (TC), Judge Chapman KC)
​
Deemed notification of a company (CA 2006, s.1139)
​
“Where it could be engaged, however, is if notification were to be given to a company under s 1139(1) CA 2006; that section authorises service by post to the company’s registered office, and accordingly s 7 IA could apply to such a notification.” (Romasave (Property Services) Ltd v. HMRC [2015] UKUT 254 (TCC), §39, Judges Berner and Falk).
Service under the Taxes acts
"(1) A notice or form which is to be served under the Taxes Acts on a person may be either delivered to him or left at his usual or last known place of residence." (TMA 1970, s.115(1))
​
Giving, sending, delivering under the Taxes Acts
"(2) Any notice or other document to be given, sent, served or delivered under the Taxes Acts may be served by post, and, if to be given, sent, served or delivered to or on any person by HMRC may be so served addressed to that person—
(a) at his usual or last known place of residence, or his place of business or employment, or
(b) in the case of a company, at any other prescribed place and, in the case of a liquidator of a company, at his address for the purposes of the liquidation or any other prescribed place." (TMA 1970, s.115(2))
​
Optional
​
"[69] The FTT recorded the argument based on Albert House but decided the issue against Mr Marano under the LLP Regulations. Mr Marano's appeal against that decision treats s.115(2) as a statutory exception to a principle that personal service of a notice from HMRC to a taxpayer is required. We are unable to accept his argument. No such principle is to be found in s.115 and no authority for the assertion was cited by Mr Gordon. It would be flatly contrary to the principles explained in Albert House, which we have summarised above.
The provisions of s.115 are permissive, not mandatory. The word "may" is used repeatedly in subsections (1) and (2). It clearly means "may", not "must", where used in subsection (2). This is because subsection (1) contains other service options for service on a person, and because Parliament cannot have intended that a notice or document given to a taxpayer by HMRC must be sent by post. The purpose of subsection (2) is to engage the presumption of due service in Interpretation Act 1978, s.7 where a notice is sent by prepaid post to a prescribed address. Other methods of service are permitted, but the risk of non-delivery is then on the sender rather than the recipient." (Marano v. HMRC [2023] UKUT 113 (TCC), Fancourt J and Judge Tilakapala)
​
Inheritance Tax: service
"A notice or other document which is to be served on a person under this Act may be delivered to him or left at his usual or last known place of residence or served by post, addressed to him at his usual or last known place of residence or his place of business or employment." (IHTA 1984, s.258)
​
SDLT: service
"(1) A notice or other document to be served under this Part on a person may be delivered to him or left at his usual or last known place of abode.
(2) A notice or other document to be given, served or delivered under this Part may be served by post.
(3) For the purposes of section 7 of the Interpretation Act 1978 (c 30) (general provisions as to service by post) any such notice or other document to be given or delivered to, or served on, any person by the Inland Revenue is properly addressed if it is addressed to that person—
(a) in the case of an individual, at his usual or last known place of residence or his place of business;
(b) in the case of a company—
(i) at its principal place of business,
(ii) if a liquidator has been appointed, at his address for the purposes of the liquidation, or
(iii) at any place prescribed by regulations made by the Inland Revenue." (FA 2003, s.84)
​
- Service on a company via proper officer
"(1) In this Part “company”, except as otherwise expressly provided, means any body corporate or unincorporated association, but does not include a partnership.
(2) Everything to be done by a company under this Part shall be done by the company acting through—
(a) the proper officer of the company, or
(b) another person having for the time being having the express, implied or apparent authority of the company to act on its behalf for the purpose.
Paragraph (b) does not apply where a liquidator has been appointed for the company.
(3) Service on a company of any document under or in pursuance of this Part may be effected by serving it on the proper officer.
[...]
​
(6) For the purposes of this Part—
(a) the proper officer of a body corporate is the secretary, or person acting as secretary, of the company, and
(b) the proper officer of an unincorporated association, or of a body corporate that does not have a proper officer within paragraph (a), is the treasurer, or person acting as treasurer, of the company.
This subsection does not apply if a liquidator or administrator has been appointed for the company.
(7) If a liquidator or administrator has been appointed for the company, then, for the purposes of this Part—
(a) the liquidator or, as the case may be, the administrator is the proper officer, and
(b) if two or more persons are appointed to act jointly or concurrently as the administrator of the company, the proper officer is—
(i) such one of them as is specified in a notice given to the Inland Revenue by those persons for the purposes of this section, or
(ii) where the Inland Revenue is not so notified, such one or more of those persons as the Inland Revenue may designate as the proper officer for those purposes." (FA 2003, s.100)
​
Time notice is given
Analogy with employment law: notice of termination only given when employee has had a reasonable opportunity to read
"[1] If an employee is dismissed on written notice posted to his home address, when does the notice period begin to run? Is it when the letter would have been delivered in the ordinary course of post? Or when it was in fact delivered to that address? Or when the letter comes to the attention of the employee and he has either read it or had a reasonable opportunity of doing so?
...
[40] I would therefore dismiss this appeal. It was only on 27 April 2011 that the letter came to the attention of Mrs Haywood and she had a reasonable opportunity of reading it." (Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood [2018] UKSC 22)
​
HMRC giving wrong email address
"[75] Finally, we believe that we would be remiss if we were not to make some observations about the Respondents' conduct in this matter. In our view, from the outset, that has not met the standards which taxpayers are entitled to expect in relation to dealings with their tax affairs.
[76] Officer Henderson's initial enquiry letter of 26 March 2021 contained a number of egregious errors, as outlined in paragraph 2(12) above. One of those errors - the fact that an incorrect email address was set out on the top of the letter - meant that the Appellant's emails to Officer Henderson never arrived. Moreover, that incorrect email address had not been corrected when Officer Henderson wrote to the Appellant on 24 January 2024, even though Officer Henderson had been made aware of the mistake a long time before and had previously apologised for it. We do not understand why that was the case." (Kent Couriers Limited v. HMRC [2024] UKFTT 145 (TC), Judge Beare)
​
VAT communications may be in writing or otherwise
"Any notice, notification, requirement or demand to be served on, given to or made of any person for the purposes of this Act may be served, given or made by sending it by post in a letter addressed to that person or his VAT representative at the last or usual residence or place of business of that person or representative." (VATA 1994, s.98)
​
VAT: send to last or usual residence or place of business
"Any notice, notification, requirement or demand to be served on, given to or made of any person for the purposes of this Act may be served, given or made by sending it by post in a letter addressed to that person or his VAT representative at the last or usual residence or place of business of that person or representative." (VATA 1994, s.98)
​
No deemed notification of agent
​
“Postal delivery to an agent, with the exception of a VAT representative which is not relevant in this case, is not specifically authorised or required by s 98 or elsewhere in the VATA, although it is, as we have described, not precluded. In the context of service on an agent, therefore, section 7 IA is not engaged at all.” (Romasave (Property Services) Ltd v. HMRC [2015] UKUT 254 (TCC), §39, Judges Berner and Falk).
VAT partnership communication
Joint and several liability of partners to give notice
​
"(1) Where any notice is required to be given for the purposes of the Act or these Regulations by a partnership, it shall be the joint and several liability of all the partners to give such notice, provided that a notice given by one partner shall be a sufficient compliance with any such requirement.
(2) Where, in Scotland, a body of persons carrying on a business which includes the making of taxable supplies is a partnership required to be registered, any notice shall be given and signed in the manner indicated in section 6 of the Partnership Act 1890." (SI 1995/2518, r.7)
​
Deemed service on partnership
​
(4) Without prejudice to section 16 of the Partnership Act 1890 (notice to acting partner to be notice to the firm) any notice, whether of assessment or otherwise, which is addressed to a partnership by the name in which it is registered by virtue of subsection (1) above and is served in accordance with this Act shall be treated for the purposes of this Act as served on the partnership and, accordingly, where subsection (3) above applies, as served also on the former partner.(VATA 1994, s.45(4))
​
Deemed service on partners in partnership
"(3) Where a person ceases to be a member of a partnership during a prescribed accounting period (or is treated as so doing by virtue of subsection (2) above) any notice, whether of assessment or otherwise, which is served on the partnership and relates to, or to any matter arising in, that period or any earlier period during the whole or part of which he was a member of the partnership shall be treated as served also on him." (VATA 1994, s.45(3))
​
VAT assessment: notice to representative treated as notice to representee
"(10) For the purposes of this section notification to a personal representative, trustee in bankruptcy, trustee in sequestration, receiver, liquidator or person otherwise acting as aforesaid shall be treated as notification to the person in relation to whom he so acts." (VATA 1994, s.73(10) and see to the same effect s.76(10))
​
Electronic communication
VAT specified communications
​
"(1) A specified communication may be made to the Commissioners using an electronic communications system.
(2) Where an electronic communications system is used it must take a form approved by the Commissioners in a specific or general direction.
(3) A direction under paragraph (2) may in particular—
(a) modify or dispense with any requirement of a form mentioned in regulation 2(3) used to make a specified communication;
(b) specify different forms of electronic communications system for different cases; and
(c) specify different circumstances in which the electronic communications system may be used, or not used, by or on behalf of the person required to make the communication and specify different circumstances for different cases.
(4) An electronic communications system shall incorporate an electronic validation process.
(5) Subject to paragraph (6) below and unless the contrary is proved—
(a) the use of an electronic communications system shall be presumed to have resulted in the making of a communication to the Commissioners only if this has been successfully recorded as such by the relevant electronic validation process;
(b) the time of making a communication to the Commissioners using an electronic communications system shall be presumed to be the time recorded as such by the relevant electronic validation process; and
(c) the person delivering a communication to the Commissioners shall be presumed to be the person identified as such by any relevant feature of the electronic communications system.
(6) No communication shall be treated as having been made using an electronic communications system unless it is in the form required by paragraph (2).
(7) A communication made using an electronic communications system carries the same consequences as a communication made in paper form.
(8) In paragraph (2) “direction” refers only to a current direction, and a direction is not current to the extent that it is varied, replaced or revoked by another Commissioners' direction." (SI 1995/2518, r.4A)
​
Specified communications
​
"A specified communication is—
(a) an application under section 43B(1), (2)(d) or (3) of the Act (Groups: applications);
(b) a notification under regulation 5(1), (2) or (3) (registration and notification);
(c) an application under regulation 6(1)(d) (transfer of a going concern);
(d) a notification under regulation 10(1) or (4) (VAT representatives);
(e) an application under regulation 52(1) (annual accounting scheme: eligibility);
(f) a notification under regulation 54(2) (annual accounting scheme: termination);
(g) a notification under regulation 55(1)(d) (annual accounting scheme: termination);
(h) a notification under regulation 55B(1)(a) (flat-rate scheme for small businesses: notification of desire to join the scheme);
(i) a notification under regulation 55Q(1)(e) (flat-rate scheme for small businesses: notification of decision to withdraw from the scheme); and
(j) a notification under paragraph (3), (3A) or (4) of regulation 148A (notification of the arrival in the United Kingdom of motorised land vehicles and payment of VAT)." (SI 1995/2518, r.4B)
​
Inappropriate references to criminal/fraud
"[24] That the letter was written under the letterhead “Criminal Taxes Unit, Civil Compliance” is something Mr Robertson found alarming and inappropriate,
understandably so as the judge found. In his witness statement available to Nugee J (but not provided to the court as part of the material available for this appeal)
Mr Brown explained that the Criminal Taxes Unit (now part of Proceeds of Crime in HMRC's Fraud Investigation Service Directorate) in fact carried out both criminal and civil investigations and HMRC made clear throughout, that the investigation into Mr Robertson was and remains a civil only investigation." (JJ Management Consulting LLP v. HMRC [2020] EWCA Civ 784, Simler LJ)
​
"[94] And while I am straying beyond my role, I do think HMRC should think carefully before doing anything that might damage the taxpayers’ reputation and business interest other than the bare minimum inherent in asking a third party for information in order to check a person’s tax position. In particular, when sending out precursor letters and Sch 36 notices to third parties, HMRC should think twice before using letter headings including words such as ‘criminal’ and/or ‘fraud’. " (Mr E v. HMRC [2018] UKFTT 590 (TC), Judge Mosedale)
​