The First-tier Tribunal (FTT) has recently rewarded a taxpayer’s persistence by allowing the company’s appeal against a default surcharge. The FTT found that the taxpayer had agreed a time to pay arrangement with HMRC and as a result had a reasonable excuse for the late payment of VAT.
When Princi London Ltd made a VAT payment on 13 December 2013 HMRC issued a default surcharge of £13,378 as the payment appeared to have been due on 3rd December. The company argued that it had a time to pay arrangement in place with HMRC, but HMRC disputed this.
The company claimed that an employee had made two telephone calls on 3 December 2013 in order to request further time to pay. Although the first request was refused, a second call was made later that day, and this time the request was accepted. Telephone records were produced to the FTT confirming that two calls were mad. In addition a copy of the written note of the second conversation with a Ms Kyne was produced. HMRC argued that Ms Kyne had no memory any such conversation. HMRC’s only had records of the first conversation.
The FTT accepted that the second telephone call had been made, the fact that the officer’s name was known was seen to substantiate that Ms Kyne had been spoken to. The FTT concluded that the evidence available showed that the company had arranged a time to pay arrangement with HMRC and consequently it had a reasonable excuse for the late payment.
The success of this appeal rested on the ability to prove that the second conversation had taken place, and the contents of the note that was made of the telephone conversation. It shows that it is vital for taxpayers to keep accurate and full records of all of their dealings with HMRC.
In addition the case draws attention to the apparent inconsistencies faced by those trying to agree time to pay arrangements. The initial call resulted in a refusal of the time to pay request, but a subsequent call, taken by a different officer, proved successful.
For assistance with arranging time to pay with HMRC, help with VAT enquiries, or advice on any aspect of VAT contact our expert team on 0845 177 5500 or contact us online