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Incorrect information by third party to non-UK resident amounted to a reasonable excuse

By Mark McLaughlin, February 2021

A resident of Malaysia who was unfamiliar with the UK tax system and who was misinformed by a third party about her liability to UK tax had a reasonable excuse for the late filing of her tax return for penalty purposes. 

The appellant, a Malaysian resident who had never been to the UK, purchased a car park at Glasgow airport in May 2015. She was advised by the seller’s agents in both the UK and Malaysia that she would not be liable for UK income tax as the rent she would receive was below the personal allowance threshold (i.e. £10,500 at that time); and that she could claim relief from tax being deducted at source by the payer, by submitting a non-resident landlord (NRL1) form to HM Revenue and Customs (HMRC).

The appellant received £1,600 in the tax year 2015/16 (and 2016/17). She received nothing after that. The appellant submitted form NRL1 for 2015/16 to HMRC, which resulted in HMRC setting up a self-assessment record for.

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