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The taxpayer underpaid his PAYE tax for 2008/09 and 2009/10. He agreed a time-to-pay arrangement with HMRC over the phone in March 2011 to the effect the outstanding tax would be paid over 36 months.
The tax officer said the Revenue would write to the taxpayer to establish the payments but a letter was not received.
Later that month the taxpayer submitted an expense claim for the same years. As a result the taxman issued returns with a submission date of 7 July 2011. The documents were filed in November of that year.
HMRC imposed surcharges for late-paid income tax for 2008/09 and 2009/10 on the basis the time-to-pay deal automatically ended when the taxpayer was brought into self assessment.
The taxpayer appealed.
The First-tier Tribunal said the time-to-pay agreement was contractual: unless it included an “express term” that stated the deal would be terminated...
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