Counting skills
The taxpayer had been issued an assessment which he paid in full 29 days after the due date. Under section 59C(2), Taxes Management Act 1970, where tax remains unpaid after 28 days from the due date, the taxpayer is liable to a surcharge equal to five per cent of the unpaid tax. The question arose over whether the taxpayer was liable to pay the surcharge, as he had paid the tax due on the day following the expiry of 28 days.
Counting skills
The taxpayer had been issued an assessment which he paid in full 29 days after the due date. Under section 59C(2), Taxes Management Act 1970, where tax remains unpaid after 28 days from the due date, the taxpayer is liable to a surcharge equal to five per cent of the unpaid tax. The question arose over whether the taxpayer was liable to pay the surcharge, as he had paid the tax due on the day following the expiry of 28 days.
The Commissioners had allowed the taxpayer's appeal, saying that section 59C(2) clearly stated that the relevant day was the day following the expiry of 28 days, and that the taxpayer had paid the tax on that day.
The Revenue appealed to the High Court, where Mr Justice Ferris said that section 59C(2) only came into play when the relevant amount of tax had not been paid for 28 days. The existence of tax had to be examined on the day that time expired. Thus it was relevant to ask if any tax was outstanding on the 29th day, as there had been in the instant case. The Commissioners were therefore wrong to conclude that tax was not outstanding on the 29th day, simply because it had been paid on that day.
The Revenue's appeal was allowed.
(Thompson v Minzly, Chancery Division, 29 October 2001.)
