fbpx

Businessman Pays Dearly for Delay in Lodging VAT Penalty Appeal

13th March 2023 By

Those dissatisfied with HM Revenue and Customs (HMRC) decisions must exercise any right of appeal within tight legal time limits and should consult a solicitor as a matter of urgency. The point was powerfully made by the case of a businessman who failed to act promptly and was left nursing a six-figure bill.

Following an investigation, HMRC issued a seven-figure demand against a company in respect of alleged errors in its VAT returns. An inaccuracy penalty was also raised, and the company subsequently entered liquidation. The businessman was issued with a personal liability notice (PLN) on the basis that he was the company’s sole director and shareholder.

He had 30 days in which to lodge an appeal to the First-tier Tribunal (FTT) against the PLN, which, after amendment, came to almost £875,000. However, he did not notify the FTT that he wished to challenge the bill until more than 38 months after that deadline expired.

In seeking to explain the delay, he asserted that he had reached an agreement in principle with HMRC and thus believed that there was no need for a formal appeal. He argued that the PLN was invalid and that HMRC had contributed as much as he had to the muddled handling of his case. He said that HMRC had itself recognised that the PLN was excessive and that he was likely to be forced into bankruptcy were he required to pay the full amount.

Refusing to entertain his late appeal, however, the FTT found that the main reason for the delay was either his wilful disregard of the deadline – in the hope that the matter would simply go away if he ignored it – inattention, or an assumption that everything would be sorted out satisfactorily without further involvement on his part. None of that could be viewed as a good reason for the delay.

The FTT acknowledged that the dismissal of the appeal on grounds of delay would cause very great prejudice to the businessman. On the other side of the balance, however, was the need to ensure that statutory deadlines are respected. If the appeal were permitted to proceed, HMRC would be required to devote resources to re-examining matters it had long considered closed.

Source: Concious

Latest News

Challenge to Will's Validity Rejected by High Court

12th April, 2024 By

The best way to ensure your assets will be distributed as you wish is to have your will professionally drafted by a qualified solicitor. In a recent case, a challenge to the validity of an elderly man's will was dismissed by the High Court. The man had previously made a will in 2011, leaving most of his estate equally to his three children. In 2018, by which time one of his sons had predeceased him, he made a further will, leaving the residue of his estate to his other son...

Defiance of Family Court Orders Will Always End Badly

10th April, 2024 By

Custodial sentences very rarely come into play in the family courts. Where there have been repeated breaches of court orders, however, judges may have little choice but to clamp down. This was illustrated in the High Court during committal proceedings that stemmed from a child custody dispute. The background to the case involved contested proceedings between the father and mother of a young child. These concluded with a court order establishing that the child – a daughter – would live with the mother. Three months later the daughter travelled with...

Claim for SDLT Relief on Annex Unsuccessful

8th April, 2024 By

When buying a property consisting of more than one residence, it may be possible to claim multiple dwellings relief (MDR) against Stamp Duty Land Tax (SDLT). However, there are certain conditions that must be met for an MDR claim to succeed, as a recent case illustrates. A property was purchased for £1.8 million. Prior to the purchase, the buyer had agreed with the seller that he would be allowed to carry out works to construct a self-contained annex at the property. The buyer's SDLT return included a claim for MDR...

Divorce – Alleged Bigamy Raised in Financial Remedies Dispute

5th April, 2024 By

The issue of bigamy and its potential impact on a person's ability to seek financial remedies in a divorce came under the legal spotlight recently. A husband made an application to strike out his wife's financial remedies claim on the basis that she had committed bigamy and deceived him into a marriage when she knew she was not free to marry. This deceit, he claimed, was so egregious that, as a matter of public policy, she should be debarred from pursuing any claim for financial remedies against him. The husband based...