Poor language skills

Late VAT registration penalty

The taxpayer should have registered for VAT on 1 March 2015 but did not notify HMRC until 17 August 2015. The tax due in the late period was £8 419 so HMRC issued a penalty for £884 – this allowed a 65% mitigation for telling HMRC about the registration.

The proprietor of the taxpayer requested leniency. His main defence was that his understanding of English and the UK VAT system was poor. He also highlighted that he had co-operated with HMRC once the problem had been identified. However another problem was the taxpayer had delayed sending information requested by HMRC. As a result discounting the penalty by 100% was not appropriate.

The First-tier Tribunal said the taxpayer’s circumstances were not uncommon or exceptional. Failure to understand the legal obligations when working in a different country did not absolve a person of their responsibility to...