JMS Aggregate Supplies v Revenue & Customs [2011] UKFTT 426 (TC) (29 June 2011)

JMS Aggregate Supplies v Revenue & Customs [2011] UKFTT 426 (TC) (29 June 2011)

The appellant exercised reasonable foresight, due diligence, and proper regard for VAT payment deadlines, but was unable to avoid late payment due to exceptional cash flow difficulties caused by defaulting debtors and lack of bank support, which constituted a reasonable excuse under section 59(7)(b) VATA.

Citation
[2011] UKFTT 426
Parties
Appellant: JMS Aggregate Supplies; Respondents: The Commissioners for Her Majesty’s Revenue and Customs (Value Added Tax)
Jurisdiction
United Kingdom
Judgment Date
29 June 2011
Procedural Posture
VAT Default Surcharge Appeal / First Tier Tribunal (tax) Final Decision
Outcome
Appeal allowed
Legal Topics
VAT Penalties, Default Surcharge, Reasonable Excuse, Late Payment
Tax Law VAT Penalties Default Surcharge Reasonable Excuse Late Payment

Case Brief

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Parties

JMS Aggregate Supplies

Appellant

The Commissioners for Her Majesty’s Revenue and Customs (Value Added Tax)

Respondents

Procedural Posture

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

Legal Issues

  1. 1 Whether the cause of late payment of VAT amounts to a reasonable excuse under section 59(7)(b) VATA
  2. 2 Whether cash flow difficulties resulting from defaulting debtors and lack of bank support constitute a reasonable excuse

Ratio Decidendi

The appellant exercised reasonable foresight, due diligence, and proper regard for VAT payment deadlines, but was unable to avoid late payment due to exceptional cash flow difficulties caused by defaulting debtors and lack of bank support, which constituted a reasonable excuse under section 59(7)(b) VATA.

Court Disposition

Appeal allowed

Orders

  • Default surcharges for the periods in issue are cancelled