Armkor Ltd v Revenue & Customs [2014] UKFTT 140 (TC) (29 January 2014)

Armkor Ltd v Revenue & Customs [2014] UKFTT 140 (TC) (29 January 2014)

The illness and unexpected death of the administrator was a reasonable excuse for late payment for period 09/11, so the penalty for that period was removed. For period 03/12, the appellant should have had procedures in place and did not act as a reasonably prudent business person; thus, no reasonable excuse existed and the penalty stands. The penalty for 03/12 was not disproportionate given the facts and relevant case law.

Citation
[2014] UKFTT 140
Parties
Appellant: Armkor Ltd; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
29 January 2014
Procedural Posture
VAT Default Surcharge Appeal / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal allowed in part and dismissed in part
Legal Topics
VAT Default Surcharge, Reasonable Excuse, Proportionality of Penalty
Tax Law VAT Default Surcharge Reasonable Excuse Proportionality of Penalty

Case Brief

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Parties

Armkor Ltd

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Default Surcharge Appeal / First Tier Tribunal (tax Chamber) Decision

Legal Issues

  1. 1 Whether the appellant had a reasonable excuse for late VAT payment for periods 09/11 and 03/12
  2. 2 Whether the VAT surcharge penalty for 03/12 was disproportionate

Ratio Decidendi

The illness and unexpected death of the administrator was a reasonable excuse for late payment for period 09/11, so the penalty for that period was removed. For period 03/12, the appellant should have had procedures in place and did not act as a reasonably prudent business person; thus, no reasonable excuse existed and the penalty stands. The penalty for 03/12 was not disproportionate given the facts and relevant case law.

Court Disposition

Appeal allowed in part and dismissed in part

Orders

  • Default surcharge penalty for period 09/11 removed
  • Default surcharge penalty for period 03/12 upheld