Were coronavirus and childbirth reasonable excuses for lateness?
A company paid its VAT bills late. The director argued that there was a reasonable excuse due to coronavirus, and his partner giving birth. HMRC rejected this, so he appealed to the tax tribunal. What was the outcome?
Hawksmoor Construction Ltd (H), paid its VAT liability for the September 2020 and March 2021 periods late. This triggered a default surcharge notice, and when part of the next quarter’s liability was paid late, HMRC imposed a 5% penalty. The sole director of H tried to appeal against the penalty on the basis that the due date coincided with his absence from work for three weeks. This was due to him and his partner contracting coronavirus and being required to isolate, and also that his partner gave birth during this period.
The First-tier Tribunal rejected the reasonable excuse appeal. It agreed with HMRC that, whilst contracting coronavirus was unfortunate, there should have been provisions in place to ensure deadlines were met in the absence of key staff. It also stated that the birth of a child was not an “unforeseen event”, and observed that H appeared to have collected the VAT from customers but used this to pay business expenses rather than setting it aside to pay HMRC. As a result, the bar to persuade the tribunal was set very high, and H fell short of this.
Related Topics
-
Cut your losses to get a tax refund
You invested in a company that’s now in dire straits and your shares are worth next to nothing. Selling them isn’t an option so how do you go about getting some tax back on your bad investment?
-
HMRC updates advisory fuel rates from 1 March 2026
HMRC has published the latest advisory fuel and electric rates (AFRs) for company cars, effective from 1 March 2026. Several rates have changed since the previous quarter. What should employers be aware of?
-
5 April deadline approaching for key tax relief claims
With the end of the 2025/26 tax year now less than seven weeks away, business owners and company directors should remember that several valuable reliefs and elections must be made before 5 April. Which opportunities are about to close?