No Penalties Without Notice (Gerrit Wals v HMRC [2026])

The obligation to file a self-assessment tax return arises under section 8 of the Taxes Management Act 1970 (“TMA 1970”), and is triggered by HMRC issuing a formal notice to file. Where HMRC has not served a valid notice, any return submitted by the taxpayer is characterised in law as a voluntary return. Section 12D TMA 1970, introduced by section 87 of the Finance Act 2019 with both prospective and retrospective effect, provides that such voluntary returns are deemed to have been made in response to a notice given on the very day the return is delivered. This has a critical consequence for the penalty regime under Schedule 55 of the Finance Act 2009 (“Schedule 55”): if the deemed notice arises only on the date of filing, it is impossible for the return to be late. The practical effect is that HMRC’s entitlement to impose late filing penalties collapses entirely where no valid notice to file was ever issued. Taxpayers who have faced penalty assessments in these circumstances have strong grounds to challenge those penalties at the tribunal. This article examines the legal framework and considers how taxpayers and their advisers can respond effectively to HMRC penalty notices in light of this important statutory provision.

Case Background

In Gerrit Wals v The Commissioners for HMRC [2026] UKFTT 00621 (TC), the First-tier Tribunal (Tax Chamber) allowed an appeal against late filing penalties totalling £4,500, which HMRC had assessed under Schedule 55 in respect of the tax years 2010/2011, 2011/2012, 2012/2013, and 2014/2015. The appellant, a Dutch national residing in the United Kingdom, had instructed a chartered accountant to manage and file his self-assessment returns. His accountant prepared and submitted those returns, though on dates HMRC regarded as significantly late. HMRC duly issued a series of penalties comprising initial late filing charges, daily penalties of £10 per day, six-month penalties, and, in respect of one year, a twelve-month penalty. The appellant, who had every reason to believe his affairs were being properly managed, first became aware of the outstanding liabilities in 2022 when debt collectors contacted him, some years after his accountant had died. A late appeal was ultimately permitted by Judge Rankin, and the substantive hearing proceeded before Tribunal Judge Nigel Popplewell and Miss Patricia Gordon.

The central issue before the Tribunal was whether valid notices to file had been served on the appellant under section 8 TMA 1970. HMRC was unable to demonstrate to the civil standard that such notices had in fact been served, and the Tribunal found as a fact that none had been. The Tribunal’s initial decision in November 2025 had allowed the appeal only in respect of 2010/2011 and dismissed the remaining grounds, but the appellant’s representative applied for permission to appeal to the Upper Tribunal on the basis that the Tribunal had erred in law. On reviewing its decision under Rule 41 of the Tribunal Procedure Rules, the Tribunal accepted that error and revisited its conclusions. Applying section 12D TMA 1970, the Tribunal held that because all four returns were voluntary, the deemed notice to file arose on the date each return was submitted. Since the statutory filing deadline runs three months from the date of the notice, and the notice and the filing occurred simultaneously, it was not legally possible for any of the returns to have been filed late. The appeal was allowed in full.

Deemed Notices Under s.12D TMA 1970

Section 12D TMA 1970, inserted by section 87 of the Finance Act 2019, addresses the situation in which a taxpayer submits a self-assessment return without having first received a formal notice to file from HMRC. Such a return is treated by statute as having been made in response to a notice given on the very date it was received by HMRC. This deeming provision applies with both prospective and retrospective effect, subject to a limited set of exclusions that are unlikely to affect most taxpayers.

The practical significance of this provision is far-reaching. Under section 8(1G) TMA 1970, where a notice to file is given after 31 October in the year following the relevant year of assessment, the return must be delivered within three months of that notice. If the deemed notice arises on the date of filing, the three-month period begins on that very date, and the return is by definition delivered within it. There is therefore no lateness, and Schedule 55 cannot be engaged. This is not a technicality but a clear statutory consequence of Parliament’s decision to regularise voluntary returns through the deeming mechanism

Voluntary Tax Returns Explained

A voluntary tax return is one submitted by a taxpayer other than in response to a notice to file issued under section 8 TMA 1970. There are various reasons why this may occur. A taxpayer who has received no notice but who has a tax liability, or who has been advised to remain within the self-assessment regime, may elect to file regardless. Similarly, where a notice has been issued but cannot be proved to have been properly served, the return will in practice be treated as voluntary.

The distinction between a return made in response to a valid notice and a voluntary return has important consequences for the calculation of any filing deadline, and therefore for whether any penalty can lawfully be imposed. HMRC bears the burden of demonstrating, on the balance of probabilities, that a valid notice was served. Mere evidence that a return was ultimately received is not sufficient to discharge that burden. As the Tribunal made clear in Wals, the receipt of a return is equally consistent with it being a voluntary submission.

Voluntary Return vs Return Filed Under Notice: Key Differences