TS & B Contractors Ltd v Revenue & Customs (VAT - PENALTIES : Reasonable excuse) [2015] UKFTT 619 (TC) (01 December 2015)

TS & B Contractors Ltd v Revenue & Customs (VAT - PENALTIES : Reasonable excuse) [2015] UKFTT 619 (TC) (01 December 2015)

The Tribunal held that insufficiency of funds, even if caused by late client payment, is not a reasonable excuse under VAT law. The appellant could have foreseen cash flow difficulties and taken steps such as arranging Time to Pay or using the Cash Accounting Scheme. The due date falling on a weekend was foreseeable, and no arrangements were made to ensure timely payment. Therefore, the surcharges are upheld and the appeal is dismissed.

Citation
[2015] UKFTT 619 (TC)
Parties
Appellant: TS & B Contractors Ltd; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
01 December 2015
Procedural Posture
VAT Default Surcharge Appeal / First Tier Tribunal (tax Chamber) Decision on Papers
Outcome
Appeal dismissed
Legal Topics
VAT Default Surcharge, Reasonable Excuse, Late Payment Penalties
Tax Law VAT Default Surcharge Reasonable Excuse Late Payment Penalties

Case Brief

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Parties

TS & B Contractors Ltd

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Default Surcharge Appeal / First Tier Tribunal (tax Chamber) Decision on Papers

Legal Issues

  1. 1 Whether the appellant had a reasonable excuse for late payment of VAT for periods 10/14 and 01/15
  2. 2 Whether cash flow difficulties or late client payment constitute a reasonable excuse under VAT law

Ratio Decidendi

The Tribunal held that insufficiency of funds, even if caused by late client payment, is not a reasonable excuse under VAT law. The appellant could have foreseen cash flow difficulties and taken steps such as arranging Time to Pay or using the Cash Accounting Scheme. The due date falling on a weekend was foreseeable, and no arrangements were made to ensure timely payment. Therefore, the surcharges are upheld and the appeal is dismissed.

Court Disposition

Appeal dismissed

Orders

  • Default surcharges of £469.23 for period 10/14 and £1,431.10 for period 01/15 are confirmed.