Unexpected circumstances

The taxpayer filed his 2007/08 tax return on time but failed to pay the tax by the due date of 31 January 2009. He entered into a 'time to pay' arrangement with HMRC whereby he would make monthly instalments.

He made only three payments; in February 2010 the Revenue imposed surcharges on the outstanding debt.

The taxpayer appealed against the surcharge claiming insufficiency of funds. He explained that a consultancy agreement had been unexpectedly terminated and he did not receive payments for work he had carried out as a contractor. In addition expenses he had incurred had not been reimbursed.

The First-tier Tribunal decided the taxpayer could not have foreseen events and not known he would receive considerably less remuneration than anticipated.

He had a family of five to maintain had remortgaged his home twice and yet ‘continued to struggle on’. He therefore had...