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 VAT submissions and payments because she took reasonable care to avoid failures by her bookkeeping firm and HMRC, and remedied the failures without unreasonable delay after receiving correct advice. HMRC's refusal to reduce penalties for special circumstances was flawed, as it failed to consider the impact of incorrect advice and the appellant's efforts to comply.

Citation
[2024] UKFTT 895 (TC)
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 Administrative Law VAT Penalties Late Submission Late Payment Reasonable Excuse Special Circumstances Finance Act 2021

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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 VAT return submission and payment under FA 2021
  2. 2 Whether special circumstances justified reduction of penalties

Ratio Decidendi

The appellant had a reasonable excuse for late VAT submissions and payments because she took reasonable care to avoid failures by her bookkeeping firm and HMRC, and remedied the failures without unreasonable delay after receiving correct advice. HMRC's refusal to reduce penalties for special circumstances was flawed, as it failed to consider the impact of incorrect advice and the appellant's efforts to comply.

Court Disposition

Appeal allowed

Orders

  • Penalties for late VAT submission and payment for periods 05/23, 08/23, and 11/23 set aside.