Lemon Consulting Ltd v Her Majesty's Revenue & Customs [2009] UKFTT 35 (TC) (27 March 2009)

Lemon Consulting Ltd v Her Majesty's Revenue & Customs [2009] UKFTT 35 (TC) (27 March 2009)

The Tribunal found that the appellant's failure to pay VAT on time was due to a computer failure during the BACS payment process, which was not the appellant's fault. The appellant acted reasonably in attempting to confirm the payment status and in subsequently initiating a CHAPS payment. Therefore, the appellant had a reasonable excuse for the late payment, and the default surcharge was not payable.

Citation
[2009] UKFTT 35
Parties
Appellant: Lemon Consulting Ltd.; Respondents: Her Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
27 March 2009
Procedural Posture
VAT Default Surcharge Appeal / First Tier Tribunal (tax), Substantive Hearing
Outcome
Appeal allowed
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

Lemon Consulting Ltd.

Appellant

Her Majesty's Revenue and Customs

Respondents

Procedural Posture

VAT Default Surcharge Appeal / First Tier Tribunal (tax), Substantive Hearing

Legal Issues

  1. 1 Whether the appellant had a reasonable excuse for late payment of VAT resulting in a default surcharge

Ratio Decidendi

The Tribunal found that the appellant's failure to pay VAT on time was due to a computer failure during the BACS payment process, which was not the appellant's fault. The appellant acted reasonably in attempting to confirm the payment status and in subsequently initiating a CHAPS payment. Therefore, the appellant had a reasonable excuse for the late payment, and the default surcharge was not payable.

Court Disposition

Appeal allowed

Orders

  • Default surcharge of £5828.00 set aside
  • No order as to costs