Footing the VAT

The appellant company appealed against five default surcharges that were issued in respect of late payment of VAT during the period from May 2008 to September 2009.

The company whose primary business was the transportation of livestock was greatly affected by an outbreak of foot and mouth during the months August to December 2007.

The Department for Environment Food and Rural Affairs (DEFRA) had asked the company to assist with the slaughtering and removal of animal carcasses within the infected area.

DEFRA failed to pay for the company’s services until it was ‘absolutely satisfied’ that payment was due. As a consequence the company was put under considerable financial strain and was unable to pay its VAT return payments on time.

The First-tier Tribunal found that the company had reasonable excuse in respect of four of the five surcharges but the other could not be...