James v Revenue & Customs [2013] UKFTT 109 (TC) (07 February 2013)

James v Revenue & Customs [2013] UKFTT 109 (TC) (07 February 2013)

Mr James had a reasonable excuse throughout the period of default because the funds were used to support his company in a genuine cash flow crisis, and HMRC had agreed to a time to pay arrangement. The Tribunal has no jurisdiction to consider proportionality. The surcharge is set aside as the statutory test for reasonable excuse was met.

Citation
[2013] UKFTT 109
Parties
Appellant: Mr Thomas James; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
07 February 2013
Procedural Posture
Income Tax Surcharge Appeal / First Tier Tribunal (tax Chamber) Substantive Decision
Outcome
Appeal allowed
Legal Topics
Income Tax, Late Payment Surcharge, Time to Pay Agreement, Reasonable Excuse, Tribunal Jurisdiction
Tax Law Income Tax Late Payment Surcharge Time to Pay Agreement Reasonable Excuse Tribunal Jurisdiction

Case Brief

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Parties

Mr Thomas James

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

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

Legal Issues

  1. 1 Whether the Tribunal has jurisdiction to consider proportionality of a surcharge
  2. 2 Whether the taxpayer had a reasonable excuse for late payment under a time to pay agreement
  3. 3 Effect of default under a time to pay agreement on surcharge liability

Ratio Decidendi

Mr James had a reasonable excuse throughout the period of default because the funds were used to support his company in a genuine cash flow crisis, and HMRC had agreed to a time to pay arrangement. The Tribunal has no jurisdiction to consider proportionality. The surcharge is set aside as the statutory test for reasonable excuse was met.

Court Disposition

Appeal allowed

Orders

  • Imposition of the surcharge is set aside.