HMRC’s decision to fine a homeless man for failing to complete his tax return on time has been described as a scandal by a judge, who found he should not be penalised for missing the deadline. Krzysztof Pokorowski, a self-employed electrician, faced penalties adding up to £1,600 after failing to file his 2014-15 tax return by the date it was due. His appeal against the fines was heard at a tribunal in December.
Pokorowski, who represented himself, told the court he had ended up on the streets after losing his job and exhausting his savings, and that his documents had been lost or stolen after he was evicted from his home. Incredibly, HMRC had argued that it was his responsibility to notify them of a change of address!
Judge Nicholas Aleksander, who heard the case, said: “HMRC’s decision to pursue Mr Pokorowski for penalties in the circumstances of this appeal is a scandal. For HMRC to expect a homeless person to keep HMRC up-to-date with their address is ridiculous – and just needs to be stated to show its absurdity.”
The judgment tells how Pokorowski described how his life had started to disintegrate after he returned from a trip to Poland in April 2014. After losing his home he eventually ended up sleeping on the street until Christmas 2016 when he was told about a homeless shelter, and then in January 2017 he moved into a hostel. In April 2017 Pokorowski found a job and permanent accommodation, and he filed the tax return three months later. In the meantime, reminder letters and penalty notices were sent to his last known address in east London. These were supposed to notify him of a £100 penalty for late filing, £900 worth of daily penalties and two subsequent £300 penalties.
Prima facie these penalties were correct, although there is a mechanism whereby individuals can appeal if they have a ‘reasonable excuse’. What constitutes a ‘reasonable excuse’ is still somewhat shrouded in mystery, although according to the above case HMRC do not think that homelessness is one of them. In fact HMRC’s stance was that it was Pokorowski’s responsibility to notify them of any change of address.
In his ruling, Judge Aleksander dismissed HMRC’s arguments, and found that Pokorowski had a reasonable excuse for missing the deadline, and that he had filed without unreasonable delay once he was back in accommodation and employment.
Earlier in the year HMRC listed some of the more ridiculous ‘excuses’ put forward by taxpayers for failing to submit returns:
The case of Mr Pokorowski suggests that there may be an equally interesting list of the top 5 genuine excuses which HMRC fail to accept as reasonable (‘I was in a coma’ etc!).
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