Were coronavirus and childbirth reasonable excuses for lateness?
A company paid its VAT bills late. The director argued that there was a reasonable excuse due to coronavirus, and his partner giving birth. HMRC rejected this, so he appealed to the tax tribunal. What was the outcome?
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Review how much VAT charged on sales?
A recent Tribunal case ruled that HMRC’s logic was flawed in dealing with a “what is the supply” challenge. Does this mean you should check that you are charging VAT correctly on your sales if there could be doubt about what you are selling?
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Are buy-to-let companies worth the hype?
There’s no doubt that landlords have been on the receiving end of multiple tax hikes in recent years. So called “property experts” will tell you that the best tax-saving strategy is to operate through a company. Are they right?
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Electronic VAT return
Hawksmoor Construction Ltd (H), paid its VAT liability for the September 2020 and March 2021 periods late. This triggered a default surcharge notice, and when part of the next quarter’s liability was paid late, HMRC imposed a 5% penalty. The sole director of H tried to appeal against the penalty on the basis that the due date coincided with his absence from work for three weeks. This was due to him and his partner contracting coronavirus and being required to isolate, and also that his partner gave birth during this period.
The First-tier Tribunal rejected the reasonable excuse appeal. It agreed with HMRC that, whilst contracting coronavirus was unfortunate, there should have been provisions in place to ensure deadlines were met in the absence of key staff. It also stated that the birth of a child was not an “unforeseen event”, and observed that H appeared to have collected the VAT from customers but used this to pay business expenses rather than setting it aside to pay HMRC. As a result, the bar to persuade the tribunal was set very high, and H fell short of this.





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