Confused banking instructions

The taxpayer company appealed against a number of default surcharges imposed by HMRC.

For the VAT period to September 2009 the company’s return was submitted on time and all but £39.50 of £17 013.39 tax due was paid. The outstanding amount was paid late as a result of a misposting on a journal entry on the company’s accounting system.

The First-tier Tribunal decided a genuine error had been made but the legislation did ‘not provide shelter for mistakes only for reasonable excuses’.

Confusion did not constitute a reasonable excuse. The default could not be avoided.

The return for the next period – the three months to December 2009 – was also sent on time but the VAT was paid one day late.

The company director said he had reasonable excuse on the basis his partner’s father had died in December 2009 and the funeral was...