Depressed about your tax bill? You’re excused…
We know Christmas is sometimes described as the ‘silly season’, however the result of a recent tax case has made us wonder if maybe the taxman is Santa Claus after all…
Mr Wedgewood appealed against surcharges which HMRC had imposed on him for late payment of his tax bill. He didn’t agree with the charges and lodged an appeal claiming that he had reasonable excuse.
So what was this reasonable excuse?
Well, Mr Wedgewood had been diagnosed with long-term depression and anxiety. He said that his condition had not only prevented him from submitting a return but also paying his tax on time. However, his illness did not prevent him from earning in the region of £120,000 a year.
Given that the taxman’s list of accepted excuses is notoriously short we would have expected that Mr Wedgewood’s appeal would have been dismissed.
And we would have been wrong.
The taxman had made the fatal mistake of not reading the Mind document entitled ‘Tax and Mental Health – Removing Barriers’ and the factsheet entitled ‘Discrimination and Mental Health’. (We’re sure this will be required reading for HMRC staff from now on..).
Mr Wedgewood pointed out that HMRC had demonstrated their lack of understanding of the nature of his illness by not considering his excuse for late payment. He argued that by failing to understand his condition they were in fact guilty of discrimination.
So the obvious next question was why Mr Wedgewood had not appointed an accountant or sought tax help earlier? And indeed the tribunal judge asked the very same thing.
Mr Wedgewood’s response was that it was hard for him to admit to anyone that he was ill or even talk to his partner about it (aren’t most men guilty of this?).
Amazingly, the tribunal were sympathetic to his plight and accepted that his affairs had fallen into arrears as a result of his illness. His other saving grace was the fact that he had also finally appointed an adviser and brought his affairs up to date. Because of this, they were prepared to allow his appeal and the taxman’s surcharges were waived.
Looks like the taxman is human after all.
Whilst we wouldn’t recommend you rush off to your local GP for a diagnosis next time you're required to pay a tax demand, we suggest you email our friendly tax adviser on [email protected] to see if he can cheer you up with some sensible tax advice.