HR Transport Services Ltd v Revenue & Customs [2014] UKFTT 90 (TC) (13 January 2014)

HR Transport Services Ltd v Revenue & Customs [2014] UKFTT 90 (TC) (13 January 2014)

The appellant acted reasonably in relying on its bank to process payments in line with usual practice, and there was nothing to put it on notice that the payment would not be processed. Therefore, it was reasonable to expect the VAT payment would be received on time, and the default surcharge should be removed under s 59(7)(a) VATA 1994.

Citation
[2014] UKFTT 90 (TC)
Parties
Appellant: HR Transport Services Ltd; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
13 January 2014
Procedural Posture
VAT Default Surcharge Appeal / First Tier Tribunal Decision
Outcome
Appeal allowed
Legal Topics
VAT Default Surcharge, Reasonable Excuse, Banking Practices, Late Payment
Tax Law VAT Default Surcharge Reasonable Excuse Banking Practices Late Payment

Case Brief

Summary, issues, holding and outcome

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Parties

HR Transport Services Ltd

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Default Surcharge Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether the appellant had a reasonable excuse for late VAT payment under s 59(7)(b) VATA 1994
  2. 2 Whether payment was made in such a manner that it was reasonable to expect it would be received on time under s 59(7)(a) VATA 1994

Ratio Decidendi

The appellant acted reasonably in relying on its bank to process payments in line with usual practice, and there was nothing to put it on notice that the payment would not be processed. Therefore, it was reasonable to expect the VAT payment would be received on time, and the default surcharge should be removed under s 59(7)(a) VATA 1994.

Court Disposition

Appeal allowed

Orders

  • Default surcharge for the 08/11 VAT period is removed