Deferral confusion

The taxpayer company was late paying its PAYE tax and National Insurance for June July August September and December 2010 and January 2011.

HMRC imposed penalties under FA 2009 Sch 56. The taxpayer appealed. It claimed the months were covered in a time-to-pay agreement made with the Revenue in November 2009 in relation to the business’s VAT liabilities.

The tax department said no deferral agreement had been made to include PAYE liabilities and lack of funds did not constitute a reasonable excuse.

The First-tier Tribunal found that the taxpayer had discussed the PAYE due for June and July with the taxman and reached an informal agreement that the sums be deferred.

The evidence for the remaining months was less clear but it seemed the taxpayer believed HMRC had agreed that the August and September payments could be deferred.

The penalties for the four months were...