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The taxpayer had a total tax liability of around £75,500 for 2008/09, of which £60,353 was outstanding at 28 February 2010, triggering the surcharge for late payment.
The taxpayer claimed reasonable excuse for the late payment.
He said that on 31 January 2010, he was due to £68,513 of his tax liability. Most related to a capital gain arising from the sale of a partnership and limited liability partnership to a limited company. He paid the income tax immediately and negotiated a payment plan with HMRC to pay the rest by instalments. The Revenue confirmed the plan by letter.
By mid-April, the taxpayer discovered that no payments were being taken from his bank account, so he contacted HMRC. The officer to whom he spoke said he had not supplied details of his bank account, and he was liable to another surcharge.
The taxpayer appealed. He could not recall why his bank account details had not been given, although his father had been taken seriously ill at the time.
The tribunal agreed that the taxpayer had a reasonable excuse for not advising HMRC of his details, because he was looking after his elderly parents and believed the plan to be in place. As soon as he realised the error, he took action to correct it. The surcharge was quashed.
The taxpayer’s appeal was allowed.
