Compliance history cancelled

The taxpayer company was one day late submitting both its VAT return and payment for September 2011.

HMRC imposed a default surcharge at 15% on the ground the firm had a history of late payment. The taxpayer appealed but decided not to attend the hearing saying it had “nothing to add to the submissions… already made”.

The First-tier Tribunal noted the return for May 2009 was addressed to Drumkinnon Joinery and Building while those for March May July and August 2010 were addressed to Drumkinnon Joinery and Building Ltd.

Given the business was not incorporated until October 2010 the judge wanted to know why returns had been addressed to the company before that date.

The Revenue blamed a computer error but added that 6(3)(a) of the VAT Regulations 1995 applied: the new owner of a transferred business takes over the liabilities of the...