TC09533 - [2025] UKFTT 00593 (TC)

The appellant is a transport company owned and operated by its directors, Mr Fearney and his son.

On 4 June 2024 the appellant was assessed by HMRC for excise duty totalling £69,281. The appellant was also issued excise wrongdoing penalty notices totalling £26,672 but those penalties are not the subject of this application.

On 5 August 2024 the appellant through its solicitors appealed the assessments and made an application for hardship.

On 24 October 2024 HMRC wrote to the appellant’s solicitors requesting extensive information to support the hardship application including, but not limited to, information on the financial position following the latest accounts, cash flow forecasts, bank account statements and information on debtors and creditors.

On 19 November 2024 the appellant’s solicitors provided the appellant’s accounts for the year ended 31 March 2024 and made the following comment:

“Please see attached copy of the Company’s financial statement for the year ended 31 March 2024.

You will note that the net profit of the company is £124,797.00. We advise that payment of the tax in advance of the appeal would mean that the potential for drawings to be taken from the business by the directors and shareholders would effectively be reduced by more than 50%. This would create a situation where the directors and shareholders would not be in position to meet their own personal living expenses and would grossly impact the financial viability of the company.

We would submit that a certificate of hardship should issue.”

On 29 November 2024, following requests by HMRC for further information beyond the 2024 accounts, the appellant’s solicitors responded to HMRC as follows:

“Further to the material previously submitted, we would advise that the financial status of the company is fully proven by the provision of the company accounts.

This is standard commercial practice. Our client does not wish his company to be subject to any further scrutiny by HMRC and we would state that it should be blatantly obvious that a company of this size would suffer hardship from the payment of such an unannounced tax liability.”

On 3 December 2024 HMRC issued a hardship review conclusion letter rejecting the application on the grounds that insufficient financial information and documentation had been provided to enable HMRC to determine whether the appellant would suffer hardship.

The appellant applied to the Tribunal for hardship relief.