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 he used available funds to support his company facing a cash flow crisis, and HMRC had agreed to a time to pay arrangement. The Tribunal found that the existence and subsequent breach of the time to pay agreement, coupled with the specific financial circumstances, constituted a reasonable excuse for late payment. The surcharge was therefore set aside.

Citation
[2013] UKFTT 109 (TC)
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, Reasonable Excuse, Time to Pay Agreement, Tribunal Jurisdiction
Tax Law Income Tax Late Payment Surcharge Reasonable Excuse Time to Pay Agreement 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 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 he used available funds to support his company facing a cash flow crisis, and HMRC had agreed to a time to pay arrangement. The Tribunal found that the existence and subsequent breach of the time to pay agreement, coupled with the specific financial circumstances, constituted a reasonable excuse for late payment. The surcharge was therefore set aside.

Court Disposition

Appeal allowed

Orders

  • The surcharge imposed on Mr James is set aside.