TC09554 - [2025] UKFTT 00747 (TC)

In summary, Mr Chaudhary’s arguments were based on the following propositions:

To support his arguments, Mr Chaudhary referred to the judgment of Lightman J in R (oao UK Tradecorp Ltd) v HM Customs & Excise [2004] EWHC 2515 (Admin) (UK Tradecorp). In that case, the learned judge distinguished between a taxpayer putting in a VAT return which claims a repayment and such a repayment claim being upheld or agreed by what is now HMRC. It is only on the occurrence of the latter that a taxpayer can assert a “right” to the repayment.

Mr Chaudhary also referred to the decision of Judge Gammie and Mr Collard in this Tribunal in the case of NSF Utilities Ltd v HMRC [2018] UKFTT 9 (TC) (NSF Utilities). That was a reasonable excuse case with some superficial similarities to the present case in that it concerned the late payment of VAT when a repayment of tax from HMRC was also being claimed. As the Tribunal concluded at [32]:

“… a prudent taxpayer would have sought to take some steps to guard against the possibility that the VAT fell due before the repayment was received (which in fact the Appellant was able to do, albeit late) but we have no evidence that the Appellant did anything. In the circumstances, we conclude that the Appellant had no reasonable excuse for its default. We therefore dismiss its appeal.”

Turning to general propositions concerning reasonable excuse, Mr Chaudhary referred to the case of Rowland v HMRC (2006) SpC 548for the proposition that the phrase reasonable excuse is not statutorily defined and has to be considered in the light of all the circumstances of the particular case and the cases of The Clean Car Co and Perrin (both cited above).

Mr Chaudhary accordingly argued that, as the Appellant was not entitled to the repayment of the March 2024 quarter VAT until after HMRC had concluded their investigation (in November 2024), the Appellant could not rely on the lack of that repayment as a reasonable excuse for not paying VAT for the June 2024 quarter which fell due for payment in the meantime.

Mr Chaudhary accepted that if, contrary to his position that there was no reasonable excuse in the present case, the Tribunal reached the view that the Appellant did have a reasonable excuse, then that reasonable excuse would have continued until November 2024 when the repayment was finally agreed to by HMRC.