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The taxpayer appealed against the withdrawal of gross payment status following a review by HMRC. He was late with his second self assessment payment on account for 2008/09 and claimed reasonable excuse on the basis that his business suffered as a result of the recession.
He heard on the radio and read in newspapers about the taxman's time to pay initiative and so sent cheques to cover the amount he owed, spread over three months. He said he was not computer literate and did not visit the Revenue's website, nor did he realise he had to make a formal time to pay arrangement.
The taxpayer said that the loss of gross payment status could result in the closure of his firm and loss of his livelihood.
The tribunal concluded that the taxpayer’s misunderstanding of the time to pay facility gave him reasonable excuse. Even if that were the case, were the taxpayer’s business to fail as a result of the loss of gross payment status, it would be a wholly disproportionate consequence of making one tax payment late.
The taxpayer’s appeal was allowed.
