The company’s lack of awareness of the need to file an ATED return was not a reasonable excuse for the late filing of the return but notice of daily penalties was not validly given by HMRC and the penalties were therefore cancelled. 

The appellant company purchased a property in Thames Ditton on 10 October 2014 for £650,000. On 1 April 2016, the threshold for properties coming within the scope of annual tax on enveloped dwellings (ATED) legislation was reduced from £1 million to £500,000, thereby requiring the appellant to submit an ATED return each year.

The filing date for the ATED return for the year ended 31 March 2019 was 30 April 2018.    On 21 March 2019, the appellant’s relief declaration return was received by HM Revenue and Customs (HMRC), 325 days late. On 9 December 2019, HMRC issued a fixed penalty notice for £100. 

On 23 January 2020, HMRC issued a notice of daily(