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Automotion CPM Group Ltd (TC4380)
The taxpayer company made errors in its VAT returns for three successive VAT quarters in 2012, resulting in a net underpayment of more than £150,000.
HMRC discovered the mistakes during a compliance visit and imposed a 15% penalty for careless behaviour.
The taxpayer appealed, saying the fine should be suspended.
The Revenue refused on the ground similar errors occurred in 2010, and the penalty on that occasion was suspended on condition the company checked its output tax figures before submitting VAT returns.
The First-tier Tribunal agreed the inaccuracies were careless, but said its jurisdiction was confined to determining whether the tax department’s refusal to suspend the fine was flawed.
The tribunal could consider only the way HMRC’s decision was reached, rather than the merits of the decision.
The judge concluded that the taxpayer’s compliance history was poor and the Revenue was justified in not suspending the penalty.
The taxpayer’s appeal was dismissed.
