VAT Tribunal – Default Surcharge
In this Tribunal case a business was advised by its bank that the cut off time for making a CHAPS payment was 4:00pm. The business in question sent instructions to its bank to make a payment electronically to HMRC on the last due date for payment of its VAT return. This instruction was sent at 3:51pm. However, HMRC did not receive the payment until the following date and a default surcharge notice was issued.
This decision was appealed because it transpired that the bank had erred in the information sent to the business in question as the actual cut off time was 3:50pm. The Chairman allowed the appeal commenting that “The Appellant had given the necessary instructions within the time that the bank had told them in an email was the cut-off time. We consider that a reasonable businessman would have relied on the email ….”. The Tribunal was satisfied that the business had a reasonable excuse for the payment being made late.