Peter Alleyne v HMRC [2018] UKFTT 0354 (TC)
http://financeandtax.decisions.tribu...30/TC06568.pdf
The FTT has found for the taxpayer on the basis he had a reasonable excuse for late payment of accelerated payment notices (APNs). There was an eight year gap between correspondence regarding the enquiries and the issuing of the APNs but only a short time to make payment.
The taxpayer, Mr Alleyne, participated in a scheme that sought to exempt his UK profits under the double tax treaty with Isle of Man. HMRC raised enquires into his 2001/02 – 2002/03 and 2004/05 – 2006/07 tax returns and subsequently raised APNs for the five years. The taxpayer paid the APNs late and HMRC issued surcharges.
The taxpayer appealed against the surcharges on the basis he did not have the funds at the time to pay the APNs. HMRC argued the inability to pay was not a reasonable excuse. After analysing the facts, the FTT found the taxpayer had a reasonable excuse and dismissed the surcharges. The judge commented ‘In my view a reasonable person would be entitled to assume that a nearly eight year silence from HMRC meant that there was unlikely to be much of a chance of having to pay the tax on the amendments, and certainly not within a few months of a demand of tax coming out of the blue’.
Conclusion
On the surcharge notices, the reasonable excuse was properly accepted. Following Steptoe [1992] STC 757, while the inability to pay is not of itself a reasonable excuse, the reasons behind the inability to pay can definitely constitute one. This contrasts with the only previous case on APN surcharges – Irena Morgan (TC06055), where the APN followed within two years of the postponement and the taxpayer was held not to have a reasonable excuse for late payment.
AccountingWeb : Surcharge squashed for late paid APN
https://www.accountingweb.co.uk/tax/...rm=Read%20more
