GH Preston Partnership v Revenue and Customs (VAT - PENALTIES : Reasonable excuse)

VAT � Default Surcharge � Value Added Tax Act 1994, sections 59 and 71 � The cause of insufficiency of funds � Whether or not a reasonable excuse for late payment � yes for part of the non-payments for two periods � no for the remaining eight periods � allocation of payments - proportionality �

Sitting in public at Manchester on 24 November 2015 (with further written submissions on 8 December 2015 and 16 December 2015).

Mr Barry Sellers, Presenting Officer, instructed by the General Counsel and Solicitor to HM Revenue and Customs, for the Respondents.

This is an appeal by GH Preston Partnership (�the Partnership�) against default surcharges for the late payment of VAT in the total sum of �74,941.44. The relevant periods, defaults and amounts involved are set out in the following table:

This table takes into account an agreement between the parties at the outset of the hearing that a mistake had been made in respect of the surcharge for 09/10. Contrary to the initial calculations, the appropriate surcharge was �9,177.41 instead of �12,958.12 in order to take into account the fact that �25,204 had been paid on time. The parties also agreed that the returns were all made by their due dates with the exception of 09/09.