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Exceptional problems

09 October 2012
Issue: 4374 / Categories: Tax cases , Income Tax
P S R Control Systems Ltd (TC2155)

The taxpayer’s gross payment status under the construction industry scheme was cancelled by HMRC because the company has been late in paying its October 2010 PAYE tax and National Insurance.

The company claimed there were exceptional circumstances beyond its control which constituted reasonable excuse for the delay.

The director explained that since 2009 he had been trying to obtain an overdraft facility from his bank. He had to inject £18 000 of his own savings to enable the business to meet its commitments.

Eventually in 2011 an overdraft facility was arranged although in the meantime the company had to write off a substantial debt.

The director added it was important to the firm’s reputation to have gross payment status and it helped it win contracts.

The Revenue said “While the concept of reasonable excuse was not defined in the legislation in...

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