TC09528 - [2025] UKFTT 01069 (TC)

Fecha: 12-Ago-2025

Overview

Overview

The Appellant is a taxable person, registered for VAT with effect from 22 February 2006.

The Appellant submits its VAT returns on a quarterly basis.

The Appellant’s VAT return for quarter 09/24 was filed on 28 October 2024 (before the due date). That return declared a liability of £606,685.14. In the normal course of things, that liability would have been due for payment by 7 November 2024 (albeit, as explained below, HMRC’s position is that the Appellant was required to make payments on account on 31 August 2024 and 30 September 2024, with a balancing payment on 30 October 2024). In any event, payment of the £606,685.14 was not made until 18 November 2024.

HMRC assessed the late payment penalty on 20 November 2024 and notified the same to the Appellant on 23 November 2024.

HMRC’s position is that by letter posted on 8 May 2024, they notified the Appellant that it was now in the “Payments on Account regime”. HMRC were unable to provide a copy of the letter said to have been sent to the Appellant but did provide a copy of a specimen/pro-forma letter. HMRC submit that the letter notified the Appellant:

(1)

It was now included in the Payments on Account regime.

(2)

That its first payment on account was required to be paid by 31 August 2024.

(3)

That its second payment on account was required to be paid by 30 September 2024.

(4)

That any balancing payment was required to be paid by 31 October 2024.

(5)

Payments could not be made by Direct Debit.

At paragraph 72 of their Statement of Reasons, HMRC state “…upon entering into the POA scheme, any direct debits a taxpayer has would be cancelled”.

In view of the above, HMRC submit that the Appellant’s payment received on 18 November 2024 was late, and the Appellant is liable to the late payment penalty. HMRC do not accept that the Appellant has a reasonable excuse for the late payment.

The Appellant’s position is that it did not receive the letter that HMRC say was posted to it on 8 May 2024, and did not know that it has been included in the Payments on Account regime. Further, the Appellant did not know that it’s Direct Debit (which had previously been set up in favour of HMRC) had been cancelled. On discovering that the 09/24 payment had not been made to HMRC by Direct Debit, the Appellant paid the liability without any undue delay. The Appellant submits this amounts to a reasonable excuse.

10.

The core issue in this appeal is, then, whether the Appellant had a reasonable excuse for the late payment.