In PR Powersaving Solutions v HMRC [2016] UKFTT 386 (3 June 2016) the FTT found that the taxpayer had a reasonable excuse for the late payment of VAT.
HMRC had received the relevant VAT return in time on 6 November 2015; however when it had originated the direct debit on 11 November 2015 it had been returned unpaid because the amount of £27 000.71 had exceeded the balance of cleared funds available in the account by £1 784.61. The company had had no overdraft facility.
The FTT observed that although an insufficiency of funds does not provide a reasonable excuse Steptoe [1992] STC 757 had established that the reason for the lack of funds might provide a reasonable excuse.
The FTT also noted that the company had overpaid PAYE by £3 500 and that HMRC had been one year late in repaying it. Without this delay...
