The taxpayer employee appealed against surcharges for 2008/09 and 2009/10, contending he had requested a deferred payment agreement.
HMRC argued that “no time-to-pay arrangement was ever formally concluded” and, if there had been a payment arrangement under the PAYE system it had been cancelled when the taxpayer's agent submitted details of his client's expenses.
The First-tier Tribunal found there had been a verbal agreement for a time-to-pay arrangement, which would not have been automatically cancelled when the taxpayer had been brought in to the self assessment system.
A time-to-pay arrangement is a contractual situation under the Revenue's broad powers of collection and management, said the tribunal, and unless the deal included a term providing for termination on the transfer to self assessment, the arrangement would remain valid and continue.
The taxpayer’s appeal was allowed.
