Shine Telecom Ltd v Revenue & Customs [2012] UKFTT 448 (TC) (12 July 2012)

Shine Telecom Ltd v Revenue & Customs [2012] UKFTT 448 (TC) (12 July 2012)

A general cashflow problem does not constitute a reasonable excuse unless it is attributable to events outside the employer’s control. The specific issue with the bank’s reduction and uncertainty of the overdraft facility constituted a reasonable excuse for the first three months only. The penalty should be recalculated to reflect this partial reasonable excuse.

Citation
[2012] UKFTT 448 (TC)
Parties
Appellant: Shine Telecom Ltd; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
12 July 2012
Procedural Posture
Tax Penalty Appeal / First Tier Tribunal Decision
Outcome
Appeal allowed in part
Legal Topics
PAYE Penalties, Reasonable Excuse, Late Payment, Schedule 56 Finance Act 2009
Tax Law Administrative Law PAYE Penalties Reasonable Excuse Late Payment Schedule 56 Finance Act 2009

Case Brief

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Parties

Shine Telecom Ltd

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Tax Penalty Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether Shine Telecom Ltd had a reasonable excuse for late payment of PAYE under Schedule 56 Finance Act 2009
  2. 2 Whether the penalty imposed was unreasonably punitive or issued without warning

Ratio Decidendi

A general cashflow problem does not constitute a reasonable excuse unless it is attributable to events outside the employer’s control. The specific issue with the bank’s reduction and uncertainty of the overdraft facility constituted a reasonable excuse for the first three months only. The penalty should be recalculated to reflect this partial reasonable excuse.

Court Disposition

Appeal allowed in part

Orders

  • Penalty to be recalculated excluding first three months and month 12; penalty set at £2,211.02 subject to representations within 14 days.