Hanson v Revenue & Customs (VAT - PENALTIES : Default surcharge) [2019] UKFTT 240 (TC) (11 April 2019)

Hanson v Revenue & Customs (VAT - PENALTIES : Default surcharge) [2019] UKFTT 240 (TC) (11 April 2019)

The appellant failed to demonstrate a reasonable excuse for late payment of VAT for the periods in question. The cash flow issues and bad debt occurred over a year prior to the defaults, and no evidence was provided to show that the late payments were directly caused by unforeseeable or uncontrollable events. Insufficiency of funds is not a reasonable excuse under the law. The surcharges were correctly imposed and not disproportionate.

Citation
[2019] UKFTT 240
Parties
Appellant: Jeremy Alan Hanson; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
11 April 2019
Procedural Posture
VAT Default Surcharge Appeal / First Tier Tribunal (tax) Decision
Outcome
Appeal dismissed
Legal Topics
VAT Default Surcharge, Reasonable Excuse, Proportionality of Penalty, Bad Debt Relief
Tax Law VAT Default Surcharge Reasonable Excuse Proportionality of Penalty Bad Debt Relief

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Parties

Jeremy Alan Hanson

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

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

Legal Issues

  1. 1 Whether the appellant had a reasonable excuse for late payment of VAT for periods 05/14 and 08/14
  2. 2 Whether the penalty imposed was disproportionate

Ratio Decidendi

The appellant failed to demonstrate a reasonable excuse for late payment of VAT for the periods in question. The cash flow issues and bad debt occurred over a year prior to the defaults, and no evidence was provided to show that the late payments were directly caused by unforeseeable or uncontrollable events. Insufficiency of funds is not a reasonable excuse under the law. The surcharges were correctly imposed and not disproportionate.

Court Disposition

Appeal dismissed

Orders

  • The surcharges of £9,601.04 and £2,187.13 are confirmed.