Personal liability notice related to company’s late registration

The taxpayer’s building company was late registering for VAT so HMRC assessed tax for the period 1 March 2012 to 31 July 2013. The company’s turnover fell after this date so it was no longer required to be registered. 

The HMRC officer decided the failure to register was deliberate because the taxpayer had been involved with a VAT-registered business before and knew how to run such a business. Further the company’s records of income and outgoings were ‘meticulous’ and had been sent to its accountant each month. The officer concluded this was ‘deliberate not concealed behaviour’ and imposed a 35% penalty taking into account the taxpayer’s co-operation. 

However because it was clear the company was not going to pay the tax or penalty HMRC issued a personal liability notice to the taxpayer. 

The First-tier Tribunal rejected the taxpayer’s argument that the failure to register had been due to ‘pure error...