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C & DDH Ltd (TC3810)
The taxpayer company made late payments of PAYE and National Insurance in 2011/12. HMRC imposed penalties under FA 2009, Sch 56.
The business appealed, with the director saying he had been in “constant contact” with the Revenue about an oversight in paying the tax and about problems with the payroll bureau. Fines had not been mentioned – and the company could not afford to pay the sums demanded.
When the taxpayer made a PAYE payment of £5,512, HMRC allocated it to recent debts instead of older ones because the firm had not specified how the amount ought to be used.
The First-tier Tribunal told HMRC to extinguish the earliest debt, which led to the penalty being recalculated and reduced.
The judge said insufficiency of funds could not constitute a reasonable excuse for late payments and no special circumstance could be applied.
The fine was due, and the taxpayer’s appeal was dismissed.
