Failure to pay land transaction tax on hotel purchase

In December 2019 the taxpayer bought a hotel in Wales and submitted the land transaction tax return. It did not pay the tax so the Welsh Revenue Authority (WRA) imposed a penalty. The taxpayer appealed saying one of the directors was overseas and unable to transfer funds because of the coronavirus. It had applied for a loan at a local bank but the application was on hold also due to the pandemic. Finally the hotel had been closed – because of the virus – so the leaseholder had suspended all rent payments.

The First-tier Tribunal noted that each of the taxpayer’s reasons for the failure to pay the tax referred to the lockdown. However the tribunal decided that ‘a prudent’ taxpayer would have ensured it had enough funds to pay the tax before completion – or in this case bidding for the property which...