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The taxpayer company made several late monthly PAYE payments in 2010/11. HMRC sent a letter in May 2010 warning the business it could be liable to a penalty if it made more than one late payment in the year.
In June 2011 the Revenue issued a penalty notice charging 3% of the late-paid PAYE.
The company appealed. It accepted the payments had been late but said it had a reasonable excuse because its only customer TNT changed its payment terms over the relevant period.
The situation caused the taxpayer severe cash flow problems which took time to resolve. TNT subsequently reversed the change.
The First-tier Tribunal noted the company had contacted HMRC about its cash flow difficulties and the effect they would have on the its ability to make PAYE payments on time.
The judge found as a fact that as a result...
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