Lost or received? The knotty problem of postal service

From time to time taxpayers argue that HMRC have failed to serve documents on them, claiming that the post has gone astray in the mail and not received. This can give rise to some keenly fought battles, as the decision of the First-tier Tax Tribunal (“FTT”) in Spring Capital Ltd [2016] TC 05007 demonstrates.

The facts

HMRC issued the appellant with an information notice under Schedule 36 of the Finance Act 2008 (Sch 36) on 15 April 2015. The appellant appealed.

The sole grounds of the appeal was that there was no open enquiry into the appellant’s tax affairs to which the information notice related. In particular, the information notice stated it related to a notice of enquiry given in respect of the appellant company’s corporation tax return for the period ended 30 April 2013 but it was the appellant’s case that it had never received notice of any such enquiry until after the closing of the period in which HMRC could open an enquiry.

HMRC’s case was that a letter dated 9 January 2015 (‘the NOE letter’) gave notice of the opening of the enquiry.

The FTT’s decision

The FTT stated that Paragraph 21 of Sch 36 gives four alternate conditions, one of which must be met before an information notice can be issued in circumstances where the taxpayer has filed a self-assessment tax return for the period to which the information notice relates. Condition A stated that a notice of enquiry has been given in respect of the return. HMRC accepted that for notice of enquiry to be given to a taxpayer it had to be received by the taxpayer.

Sch 18 sets out that:

(2) Any notice or other document to be given, sent, served or delivered under the Taxes Acts may be served by post, and, if so given, sent, served or delivered to or on any person by the Board, by any officer of the Board, or by or on behalf of any body of Commissioners, may be so served addressed to that person –

 (a) at his usual of last known place of residence, or his place of  business or employment, or

 (b) in the case of a company, at any other prescribed place….’

Mr Stewart was the HMRC officer with responsibility for the appellant’s tax affairs. It was his evidence that he created and signed the NOE letter on 8 January 2015 and left it with a clerk (Ms Hendon), who held responsibility within that HMRC office for posting letters, with instructions to send it ‘track and trace’ the following day. The appellant argued that Mr Stewart had not put out for posting the NOE letter on 8 January because (1) Mr Stewart had taken no steps to follow up on the NOE letter until three months later when the information notice was sent and (2) it was Mr Stewart’s usual practice (as he accepted) to send copies of significant letters to the appellant to it by both email and post yet the NOE letter in this appeal had not been emailed to the appellant.

The FTT said:

‘In so far as Mr Stewart did not chase up the NOE letter for three months, I accept Mr Stewart’s explanation that he normally would give the appellant that amount of time to provide the information asked for in a notice of enquiry letter because he knew Mr Thomas was busy and there had been complaints from Mr Thomas in the past if Mr Stewart did not allow sufficient time to respond. So I do not find Mr Stewart’s three month delay in issuing the information notice indicated he had not created and sent the NOE in January 2015.

 And so far as the failure to email a copy was concerned, I accept Mr Stewart’s explanation that he had not done so on this occasion due to his planned absence on holiday on 9 January, the day the letter was due to be posted, and the day after he had handed it to Ms Hendon.

 As I find Mr Stewart had an explanation for his departure from his normal practice of emailing and an explanation for the three month delay in sending a follow-up, and as I find he appeared a reliable witness with a clear recollection of the event and as his evidence was consistent with the documentary evidence that a letter was both posted and delivered to the appellant at this time, I accept Mr Stewart’s evidence that he did create the NOE letter on 8 January and put it out for posting in the tray for special delivery letters having discussed it with Ms Hendon.   The documentary evidence I refer to is (a) a form completed by Ms Hendon for the posting of a letter by track and trace on 9 January to the appellant (see §20-21 below) and (b) a Royal Mail receipt for delivery dated 13 January 2015.’

The FTT stated, however, that it was not enough for HMRC to send the NOE letter: it had to be received. It was for HMRC to prove that they sent the NOE letter which they had; therefore it was now for the appellant to prove its case that the NOE letter was not received at the White House.

‘HMRC produced, as I have said, a Royal Mail receipt for delivery of the NOE letter. This contains, as I have said, the same reference number as Ms Hendon’s form and that form showed the White House address. It was also, as I have said, signed ‘Thomas’. Prima facie, therefore, it shows that delivery of the NOE letter was made to the White House to a person named ‘Thomas’.

 Messrs R and S Thomas are sure that they did not receive the NOE letter and this evidence was unchallenged… it remains a possibility that a close family member of Messrs Thomas may have signed for the NOE letter…… I do put weight on the similarity of the signature on the receipt to the signature on another similar receipt obtained by HMRC on a parcel sent to the appellant at the White House five months later in June 2015. I accept Mr Stewart’s evidence that this parcel comprised bundles for a hearing which took place in December 2015. Mr Thomas had no recollection of receiving the bundles, but did not dispute HMRC’s case that they had sent them, they had been received, and used by the appellant in the December 2015 hearing. I find it more likely than not that the bundles were delivered when this second receipt was obtained and that Mr R Thomas took possession of them. I also find it seems more likely than not that the same person signed for the bundles as signed for NOE letter.

 ……To rebut this presumption of effective service, the appellant must prove that that the letter was not delivered to the White House. It has failed to prove this. Therefore I find that HMRC did give notice of enquiry to the appellant on 13 January 2015 to open an enquiry into its return for year ended 30 April 2013. Therefore there was an open enquiry when the information notice was given on 15 April 2015 and Condition A was met.’

The Tribunal also agreed with HMRC that, in the alternative, the information notice was effective because condition B was met. Condition B is that, that, as regards the person, an officer of Revenue and Customs has reason to suspect that an amount that ought to have been assessed to relevant tax for the chargeable period may not have been assessed.


This case demonstrates the importance of evidence in cases before the FTT.  The FTT was clearly impressed with the reliability of HMRC’s witness evidence and less swayed by that of the appellant’s. It also shows that the Tribunal will delve deeply into the facts and circumstances of claimed non-receipt of postal items and it may, therefore, be an uphill task for taxpayers to deny receipt of important tax documents.


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