Question of power

The taxpayer company was registered for gross payment status under the construction industry scheme. During 2009 the business experienced cash flow problems and as a result made some tardy payments of monthly tax and National Insurance.

HMRC decided to cancel the company’s gross payment status under FA 2004 s 66(1) after the April 2009 payment was made 35 days late. The taxpayer appealed.

The First-tier Tribunal decided there was no reasonable excuse for the late payment. The company’s overdraft facility would not have been exceeded had the payment been made.

Furthermore the cash flow difficulties were not an excuse. These had been a problem for some time and the firm should have been able to find ways of dealing with them.

However the tribunal noted that s 66 said the taxman ‘may’ make a determination ...