Impact of absenteeism

The taxpayer company had suffered financially since 2007 and failed to keep up with its PAYE liabilities. HMRC’s business payment support service was unable to help.

Part of the taxpayer’s problem was a bad debt that the firm was trying to recover. There was also an unusually high level of employee absenteeism which caused a lot of disruption and adversely affected cash flow.

The Revenue imposed penalties for late payment of PAYE tax and National Insurance. The company appealed.

The First-tier Tribunal noted that taxpayer was in a specialised industry with skilled employees. If they fell ill completion of contracts was sometimes delayed because it was not easy to find stand-in workers with the same proficiencies.

The company had taken steps to improve and to pay its tax bills; it was unfortunate that the business payment support service had been unhelpful.

The tribunal concluded that the taxpayer had...