In Conchri Investments Limited v HMRC [2025] TC09540, the First Tier Tribunal (FTT) confirmed £15,700 worth of penalties for the late filing of Annual Tax on Enveloped Dwellings (ATED) returns, finding that there was no reasonable excuse or special circumstance to justify a reduction.
Annual Tax on Enveloped Dwellings
ATED is payable by non-natural persons that own UK residential property which is valued at more than:
- £2 million for returns filed from 2013/14 onwards;
- £1 million for returns filed from 2015/16 onwards; and
- £500,000 for returns filed from 2016/17 onwards.
ATED returns must be filed by 30 April if the property is within the scope of ATED on 1 April or within 30 days of the acquisition of the property if it comes within scope after 1 April. Any claims for relief from paying ATED must be made in the ATED return. Penalties are payable for failing to file the return or filing it late.
Conchri Investments Limited v HMRC
Conchri Investments Limited (the Company) was required to complete ATED returns for the periods ending 30 April 2013 to 30 April 2023. However, the Company filed these returns late and HM Revenue and Customs (HMRC) issued penalties totalling £15,700.
The Company appealed these penalties, seeking to rely on the following matters:
- The Company had always filed its self-assessment returns and corporation tax for company tax returns on time. HMRC would have known from these filings that the property owned by the Company was entitled to relief from ATED.
- HMRC had not advised or warned the Company of the penalties for late filing.
- The previous accountants for the Company had not advised the directors that ATED returns should have been filed.
- The penalties are very high given there was no tax due on the ATED returns.
The FTT found that there was no reasonable excuse or special circumstances which would justify reducing the penalties.
As to the Company’s first two points, the FTT stated that there was clear and extensive information available on HMRC’s website regarding ATED filings and that HMRC is under no obligation to notify companies of the requirement to file an ATED return. Additionally, the Company provided no valuation evidence to demonstrate that the property value meant that it was entitled to relief from ATED.
Regarding the accountants, reliance on a third party is specifically precluded from being a reasonable excuse for failing to make a filing under the Finance Act 2009.
Finally, the value of the penalties are set by statute and apply even if no tax is due. The FTT has no jurisdiction to set aside such penalties.
Therefore, the FTT was unable to find any special circumstances or reasonable excuse which would allow it to reduce the penalties, and it dismissed the appeal.
This decision confirms that HMRC are not obliged to tell taxpayers that they may have to file ATED returns. It also confirms that parties cannot provide further information in support of their case after the decision has been released, which the Company tried to do. On this point, the FTT quoted Lewison LJ in FAGE UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5: “The trial is not a dress rehearsal. It is the first and last night of the show.”
Please contact Catherine Pugsley, Anna Gaston or Hannah Fingleton in our Private Client Team on 020 7222 5381 to discuss this further.