Hana Services Limited v The Commissioners for HMRC
[2024] UKFTT 640 (TC)
Darren Mynett v The Commissioners for HMRC
24 July 2023
[2023] UKFTT 652 (TC)
First-tier Tribunal
A business owner was late paying VAT and appealed the penalty. The court said the penalty notices were sent correctly to his old address (even though he'd moved), and his reason for being late wasn't good enough. He had to pay the penalty.
Key Facts
- •Appeal against HMRC's VAT default surcharge of £1,913.62 for periods 06/2021 and 09/2021.
- •Appellant, a sole trader, claimed a reasonable excuse for late submission due to an oversight in updating his VAT correspondence address after a house move.
- •HMRC argued the surcharge notices were correctly issued and served, and no reasonable excuse existed for the defaults.
- •Appellant had been registered for VAT since 26 April 2010.
Legal Principles
Default surcharges are imposed under section 59 of the Value Added Tax Act 1994 (VATA 1994) for failure to submit VAT returns or pay VAT by the due date.
VATA 1994, section 59
Service of surcharge notices must be valid; HMRC can serve notices by post to the taxpayer's last or usual place of business (VATA 1994, s. 98; Interpretation Act 1978, s. 7).
Customs and Excise Commissioners v Medway Draughting and Technical Services Ltd [1989] STC 346; VATA 1994, section 98; Interpretation Act 1978, section 7
A 'reasonable excuse' for late payment is determined objectively, considering all circumstances and the taxpayer's attributes and situation. Insufficiency of funds or reliance on others are not reasonable excuses.
Rowland v Revenue and Customs Commissioners [2006] STC (SCD) 536; The Clean Car Company v C&E Commissioners [1991] BVC 568; Christine Perrin [2018] UKUT 0156 (TCC); Porter & Company [2019] UKFTT 178 (TCC); Hawksmoor Construction Ltd v HMRC [2022] UKFTT 209 (TC); VATA 1994, section 71
Outcomes
Appeal dismissed.
The surcharge notices were validly served, and the Appellant failed to demonstrate a reasonable excuse for the late VAT returns and payments. His own admission of oversight was key.
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