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The taxpayer company had two director-shareholders a father and son who worked full-time along with two other shareholders one whom was retired and the other worked part-time.

The father fell ill in April 2010 leaving the son to run the business which led to some late PAYE monthly payments.

HMRC accepted that the son had a reasonable excuse for the late payments for May June and July 2010 (months one to three) but said he should have put adjustments in place thereafter to ensure payments were made on time.

The tax department imposed penalties under FA 2009 Sch 56 for months four to ten. The taxpayer appealed.

The son explained he posted the cheque for each PAYE amount one or two days before the due date: months four and eight were mailed on the 16th of the month months five...