Hardship application was reasonable

The taxpayer appealed against a VAT assessment. It said it was unable to pay the VAT due of about £110 000 and applied to HMRC for hardship (VATA 1994 s 84(3B)). A taxpayer usually has to pay any VAT assessed before they can appeal but the requirement is waived in the case of hardship. Here HMRC did not accept that there was hardship so the taxpayer appealed to the First-tier Tribunal.

The tribunal said that it was for the taxpayer to establish hardship. The judge went on to say that based on the evidence presented to it HMRC ‘had no alternative but to refuse hardship’. Indeed the tribunal would have made the same decision. However this did not matter ‘today’. What mattered was the evidence provided to the tribunal. In this case the tribunal decided to accept the oral evidence offered by the...