Surcharges for late payment of notices

The taxpayer had participated in Montpelier avoidance schemes. HMRC had opened enquiries in 2003. Closure notices charging additional tax were issued in 2009 the taxpayer’s agent appealed and the tax was postponed.

The taxpayer heard nothing from the department until November 2016 when he received accelerated payment notices (APNs) for the five enquiry years. He sent representations to HMRC about the notices saying he was unable to pay them by the due date.

HMRC confirmed them and because the taxpayer did not pay them on time it issued surcharges. The taxpayer appealed against these.

The First-tier Tribunal accepted the notices complied with the legislation and the surcharges were validly issued. But the judge decided the taxpayer had reasonable excuse for the late payment. He said: ‘There was a seven-and-a-half year gap before HMRC used powers which did not exist in 2009 to make the tax...