Payment would cause financial hardship

In November 2019 after an enquiry HMRC sent the company an assessment for £280 903 for deliberate inaccuracies on VAT returns for the periods September 2013 to September 2019 ie underpaid output tax. The company appealed and asked HMRC to postpone payment of the tax while the appeal process was under way. This was on the basis that payment would cause it to suffer hardship (VATA 1994 s 84). HMRC refused the request so the company appealed to the First-tier Tribunal.

The tribunal noted that the legislation produced an ‘all or nothing’ outcome. The fact that some tax could be paid within the financial constraints of a business was irrelevant. The judge referred to a previous case about hardship (NT ADA Ltd (TC7161) and adopted the tribunal’s decision in that to the effect that he should consider only the taxpayer’s ‘immediately...