VAT – Default Surcharge
In a recent Tribunal case it was found that a business provided a reasonable excuse for the late submission of a VAT return.
In this case the business submitted its VAT return a day late. The business had tried to file the VAT return electronically a total of three times on the day before the return was due.
The initial on-line filing was rejected due to a problem with HMRC’s server and this fact is held on record by HMRC. The subsequent errors were as a result of unrelated technical difficulties by the person seeking to submit the return.
The Tribunal Chairman found strongly in favour of the Appellant and even commented as follows
“there is something almost ridiculous in the proposition that the Appellant should suffer a penalty of nearly £1,000, at a time when it will doubtless be finding current business difficult, all because of problems initially caused by a fault on the part of HMRC, rather than the Appellant at all
This case shows clearly that there are reasonable excuses that should be accepted if not by HMRC then by a Tribunal. It is important that any business which beliefs it has a reasonable excuse for late submission of a return should keep documentary evidence of the fact.