In a striking case which shows that even tax deadlines can occasionally give way to compassionate circumstances, a construction company succeeded in overturning a substantial penalty imposed for a two-day delay in paying its VAT bill.
The company had relied upon an accountant to prepare and submit its VAT returns. On the Friday on which the VAT should have been paid, the latter endured a crisis at home and had to leave the office temporarily. His elderly and frail parents were at home alone with his young daughter, who had been taken ill unexpectedly. By the time he returned to work, the banks had closed for the weekend so that the VAT payment did not go through until the following Monday. HM Revenue and Customs imposed a surcharge of £16,237 in respect of the delayed payment.
In upholding the company’s challenge to the penalty, the First-tier Tribunal found that it was entitled to rely upon the accountant, who had always performed his role satisfactorily in the past. His account of events on the critical day was credible and a reasonable excuse for the delayed payment had thus been established.