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Cash flow problems

24 November 2015
Issue: 4528 / Categories: Tax cases , Admin

Bromcom Computers plc (TC4691)

The taxpayer suffered cash flow difficulties from 2010/11 and during that year was unable to pay the PAYE and National Insurance due. A time-to-pay arrangement was set up but later cancelled by HMRC. This was on the ground that the taxpayer had broken it by spending money on its business rather than paying HMRC. They lodged a winding-up petition on the company but this was later dismissed. By February 2012 the taxpayer had paid the outstanding tax and National Insurance.

HMRC imposed penalties under FA 2009 Sch 56 for the late paid tax. The taxpayer appealed. It said it had reasonable excuse because of the length of time to reach a settlement in connection with alleged illegal action by local authorities to comply with procurement law.

The First-tier Tribunal said it was clear that the taxpayer had cash flow problems in the period ...

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