Not a businessman

Reasonable excuse for failing to register for VAT

The taxpayer concluded that his eBay sales of adult motorbike protective clothing were exempt from VAT as protective equipment. The only sales that were potentially zero rated were motorbike helmets. HMRC said he should have registered for VAT from 1 November 2012 because his sales exceeded the registration threshold on 30 September 2012. It raised assessments and imposed a late registration penalty of £4 792 – 20% of the net tax owed.

The taxpayer said he had a reasonable excuse for the non-registration. He had received incorrect advice from a supplier about the VAT liability of protective clothing. Further he had never run a business before and had no knowledge of VAT legislation. He did not knowingly avoid VAT and regretted his error. He said HMRC had agreed his behaviour was not deliberate.

The tribunal accepted that the taxpayer was not...