Default Surcharge – Reasonable Excuse?

In the case of Princi London Limited, the VAT Tribunal allowed the appeal of the taxpayer in respect of a default surcharge totalling £13,378. The appellant was seeking to argue that it had a “reasonable excuse” for the late payment of its VAT return.


The Appellant had contacted HMRC on two separate occasions to request Time To Pay the company’s VAT return and the Appellant from his notes can evidence that he spoke to an officer of HMRC, however, the officer cannot recall the conversation in question.


The Tribunal ruled that on the available evidence a Time To Pay arrangement was agreed between HMRC and the Appellant and thus the business had a “reasonable excuse” for its late submission of its VAT payment.


The above highlights the need to communicate with HMRC in the event that a business is struggling to meet a VAT obligation.


In light of the above, if any of your client’s have received a penalty from HMRC, please contact our free helpline to discuss whether they have a reasonable excuse.

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