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Tax transfer

27 March 2013
Issue: 4396 / Categories: Tax cases , Admin

T James (TC2527)

The taxpayer entered into a time-to-pay arrangement with HMRC to pay his self-assessment tax liabilities but he did not keep up the payments.

The Revenue cancelled the agreement and began recovery proceedings. The department also issued a surcharge for late payment.

The taxpayer explained he was experiencing cash flow problems because he had to provide his companies QUK and Quattro Holdings with funds to enable them to pay PAYE VAT and corporation tax.

The First-tier Tribunal said inability to pay tax was not a reasonable excuse in itself but “the reasons why a person is unable to pay can constitute a reasonable excuse”.

In this instance the taxpayer had a choice of whether or not to comply with the time-to-pay plan or fund his companies. He decided on the latter option because he thought it would be “imprudent to neglect QUK’s position”. Were the business to...

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