Krywald v Revenue and Customs (VAT - late submission and payment penalties) [2024] UKFTT 895 (TC) (07 October 2024)

Krywald v Revenue and Customs (VAT - late submission and payment penalties) [2024] UKFTT 895 (TC) (07 October 2024)

The appellant had a reasonable excuse for late submission and payment of VAT returns because she took reasonable care to avoid failures by her bookkeepers and HMRC, acted promptly upon receiving correct advice, and remedied the failures without unreasonable delay. Alternatively, the combination of Covid-related disruptions, incorrect HMRC advice, and the conduct of the bookkeeping firm constituted special circumstances justifying reduction of penalties to zero.

Citation
[2024] UKFTT 895
Parties
Appellant: Sandra Krywald; Respondents: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
07 October 2024
Procedural Posture
VAT Penalty Appeal / First Tier Tribunal (tax Chamber) Substantive Decision
Outcome
Appeal allowed
Legal Topics
VAT Penalties, Late Submission, Late Payment, Reasonable Excuse, Special Circumstances, Finance Act 2021
Tax Law VAT Penalties Late Submission Late Payment Reasonable Excuse Special Circumstances Finance Act 2021

Case Brief

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Parties

Sandra Krywald

Appellant

The Commissioners for His Majesty's Revenue and Customs

Respondents

Procedural Posture

VAT Penalty Appeal / First Tier Tribunal (tax Chamber) Substantive Decision

Legal Issues

  1. 1 Whether the appellant had a reasonable excuse for late submission and payment of VAT returns for periods 05/23, 08/23, and 11/23 under FA 2021
  2. 2 Whether there were special circumstances justifying reduction of penalties

Ratio Decidendi

The appellant had a reasonable excuse for late submission and payment of VAT returns because she took reasonable care to avoid failures by her bookkeepers and HMRC, acted promptly upon receiving correct advice, and remedied the failures without unreasonable delay. Alternatively, the combination of Covid-related disruptions, incorrect HMRC advice, and the conduct of the bookkeeping firm constituted special circumstances justifying reduction of penalties to zero.

Court Disposition

Appeal allowed

Orders

  • Penalties for late submission and late payment for VAT periods 05/23, 08/23, and 11/23 set aside; if not for reasonable excuse, penalties would be reduced to zero due to special circumstances.