Failure to seek time-to-pay arrangement

The taxpayer sold shares but it was agreed that he would receive the proceeds only when the company completed the sale of a warehouse. His agent called HMRC to explain that the taxpayer would be unable to pay the tax due on the share disposal on time. HMRC said it could put a note in the taxpayer’s record but it would not stop interest or penalties. The officer suggested the agent make a time-to-pay arrangement but the agent did not do this. The taxpayer paid the tax when the property sale went through but in the meantime HMRC imposed late payment penalties.

The taxpayer appealed.

The First-tier Tribunal said the question was whether the taxpayer telling HMRC of the ‘factual position’ – that he had not received the funds from his share disposal – constituted a reasonable excuse.

The tribunal thought not. The judge said when a...