The taxpayer fights back

The First–Tier Tribunal hears several cases together on the topic of HMRC’s requirement for online filing of VAT returns and electronic payment of VAT

Approximately 100 taxpayers have filed appeals against notices to file online. Most are VAT returns, but some are PAYE returns.

The tribunal notified all appellants lodging appeals against the requirement that the Low Income Tax Reform Group (LITRG) would offer free representation.

Three of the four cases heard were represented on behalf of LITRG and the fourth was represented under direct access as his complaint was not that he would have difficulty filing online, but felt that the risks in filing online and paying VAT online were such that he felt that the law should not compel him to do so.

Another group of cases has an objection to filing online due to religious beliefs.

The selection of the group was on the grounds that the issues were complex and the cases represented a representative selection of those who might have difficulty filing online.

The matters at issue include whether the tribunal was empowered to decide if the secondary legislation empowering HMRC to require online filing or to compel payment by electronic means was unlawful.

After examining the European Communities Act 1973, the Human Rights Act 1998 and the VAT regulations 1995/2518, it was decided that the tribunal did have that power.

There was little awareness of HMRC’s telephone filing service and HMRC had done little to increase awareness, preferring to give the impression that there was no option but to file online.

However, telephone filing would be very inconvenient to all three taxpayers.

The tribunal concluded that the appeals should be allowed for the following reasons:

  • Mr Sheldon is too disabled to use a computer accurately. The only options available are to use family or friends as an agent, which does not respect his right to non-interference with his possessions, directly discriminating against his disability;
  • Mr Bishop is too disabled to use a computer without pain and is also discriminated against because of his disability;
  • Mr Tay is computer illiterate and old; he also lives in a remote area. He would have to rely on family and friends and is therefore also discriminated against. 

The fourth appellant claims the right to conduct his business offline, but the tribunal decided that his freedom to conduct his business is not affected by the obligation to file online and pay electronically.

He would also have the option to pay by bank giro, which although electronic, would not necessitate committing his bank details to the internet.

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