Contractor UK reports that the first tier tax tribunal found that the businessman had a “reasonable excuse” for a string of defaults, arising because he thought his TTP arrangement continued after the VAT period of 11/2008.
His financial difficulties continued after the period (to the extent his company was forced to close); he regularly spoke to tax officials on the phone, but was never advised by HMRC that the arrangement to defer his VAT liability had expired.
HMRC contended it only agreed a single TTP arrangement for Value Added Tax prior to 11/2008, not the four subsequent VAT periods (as the taxpayer claimed). However, a first tier tax tribunal judge was unconvinced.
The tribunal reviewed HMRC's phone logs and concluded that the taxpayer had been “misled” by HMRC and the VAT default surcharges totalling £4,539.84 in respect of the VAT periods 02/09, 05/09, 08/09 and 11/09 be discharged in full. A default surcharge is a penalty levied on businesses that submit late VAT returns or late payments.
This case highlights the importance of keeping accurate records of meetings, correspondence and phone calls with HMRC.
Tax does have to be taxing.
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