Bindery Machinery Services v Revenue and Customs (VAT - PENALTIES : Default surcharge) [2016] UKFTT 151 (TC) (02 March 2016)

Bindery Machinery Services v Revenue and Customs (VAT - PENALTIES : Default surcharge) [2016] UKFTT 151 (TC) (02 March 2016)

The tribunal held that BMS did not have a reasonable excuse for the late VAT payment. The cash flow issues and administrative errors were foreseeable and had occurred previously, so they could not be considered unforeseen or outside BMS's control. The appeal was dismissed and the surcharge upheld.

Citation
[2016] UKFTT 151
Parties
Appellant: Bindery Machinery Services; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
02 March 2016
Procedural Posture
VAT Default Surcharge Appeal / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal dismissed
Legal Topics
VAT Default Surcharge, Reasonable Excuse, Late Payment Penalties
Tax Law VAT Default Surcharge Reasonable Excuse Late Payment Penalties

Case Brief

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Parties

Bindery Machinery Services

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 insufficiency of funds constitutes a reasonable excuse for late VAT payment
  2. 2 Whether administrative error or reliance on staff is a reasonable excuse under VAT legislation
  3. 3 Whether the surcharge was correctly assessed at 5%

Ratio Decidendi

The tribunal held that BMS did not have a reasonable excuse for the late VAT payment. The cash flow issues and administrative errors were foreseeable and had occurred previously, so they could not be considered unforeseen or outside BMS's control. The appeal was dismissed and the surcharge upheld.

Court Disposition

Appeal dismissed

Orders

  • Surcharge of £5,009.01 upheld against Bindery Machinery Services