Padley v Revenue and Customs (INCOME TAX/CORPORATION TAX : Penalty) [2016] UKFTT 493 (TC) (13 July 2016)

Padley v Revenue and Customs (INCOME TAX/CORPORATION TAX : Penalty) [2016] UKFTT 493 (TC) (13 July 2016)

The appellant had a reasonable excuse for late payment of income tax in 2011 and 2012 due to a combination of unexpected and unforeseeable events outside his control, including severe cash flow problems caused by exceptional weather and business downturn. He exercised reasonable foresight, due diligence, and took all reasonable steps to meet his tax obligations. The penalties were therefore discharged.

Citation
[2016] UKFTT 493
Parties
Appellant: Jonathan Padley; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
13 July 2016
Procedural Posture
Income Tax/corporation Tax Penalty Appeal / First Tier Tribunal (tax Chamber) Substantive Decision
Outcome
Appeal allowed
Legal Topics
Income Tax, Late Payment Penalties, Reasonable Excuse, Special Circumstances, Disproportionate Penalties
Tax Law Income Tax Late Payment Penalties Reasonable Excuse Special Circumstances Disproportionate Penalties

Case Brief

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Parties

Jonathan Padley

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Income Tax/corporation Tax Penalty Appeal / First Tier Tribunal (tax Chamber) Substantive Decision

Legal Issues

  1. 1 Whether the appellant had a reasonable excuse for late payment of income tax for the years ending 5 April 2011 and 5 April 2012
  2. 2 Whether the penalties imposed were disproportionate or should be reduced due to special circumstances

Ratio Decidendi

The appellant had a reasonable excuse for late payment of income tax in 2011 and 2012 due to a combination of unexpected and unforeseeable events outside his control, including severe cash flow problems caused by exceptional weather and business downturn. He exercised reasonable foresight, due diligence, and took all reasonable steps to meet his tax obligations. The penalties were therefore discharged.

Court Disposition

Appeal allowed

Orders

  • The late payment penalties imposed for the years ending 5 April 2011 and 5 April 2012 are discharged.