Lack of communication

The taxpayer appealed against a surcharge in respect of late-paid tax for 2008/09 – which he said was not applicable because he had made a time-to-pay arrangement with HMRC in January 2009.

The Revenue wrote to the taxpayer in September 2011 informing him his arrangement ended in April 2010. The taxpayer claimed this was the first time he had been made aware of the cancellation.

HMRC said he had been told “on numerous occasions” but the department was unable to provide details of any such communication.

The First-tier Tribunal decided the taxman had “unilaterally cancelled the time-to-pay agreement but failed to inform the appellant”.

This was “remarkable” to the judge who said that “fair dealing and good practice would suggest HMRC should at least inform a taxpayer” if officials planned to terminate an arrangement.

The judge added that the taxpayer was justified in assuming time-to-pay was still...