Unable to quash penalty

The taxpayer company decided it would pay its employees but delay making PAYE payments during 2010/11 because of cash flow problems. The business had not entered into a time-to-pay arrangement with HMRC for the year.

The Revenue charged penalties for the late tax and the taxpayer appealed. The company’s director said he had not had reasonable notice that fines would be levied only that they may be incurred. 

The taxman brought the sanctions to the taxpayer’s notice 17 months after they had arisen meaning they were imposed retrospectively and not in a timely way claimed the director insisting that HMRC should notify taxpayers during relevant periods not many months later. He did not offer a reasonable excuse for late payment of PAYE tax.

The First-tier Tribunal sympathised with the taxpayer’s predicament but – in light of the Upper Tribunal’s decision in...