Online hiccup

Reasonable excuse for a one-day late VAT payment

The taxpayer’s October 2016 VAT return was submitted online by its accountant from his hospital bed on 7 December. However the taxpayer was unable to arrange payment through online banking until the next day. It was therefore one day late and incurred a default surcharge of 10% of the tax due on the return. The taxpayer appealed against the surcharge on the basis that there was a reasonable excuse because of the accountant’s condition.

HMRC said that the accountant’s illness was not a reasonable excuse because he had advance notice from the hospital on 21 November. It was therefore a ‘foreseeable situation’ and other arrangements should have been made to ensure the VAT was paid on time.

The First-tier Tribunal accepted the taxpayer could have made a payment in advance of the accountant being admitted to hospital but said it seemed that...