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Any point appealing against surcharges?

Any point appealing against surcharges?

A new client came to me last year needing tax returns for 2004-2010 as he had a rental property with tax owing for the last 6 years. The tax bill came to about £5,000. He couldn't afford to pay straight away so in the covering letter he offered to pay by monthly instalments and enclosed the first cheque. HMRC banked the cheque, issued the assessments but failed to respond to his request. He continued sending cheques each month.

3 months later the surcharges turned up. He appealed to HMRC on the grounds that they had failed to respond to correspondence and that he would have got a loan and paid the balance in full had he known his request had been ignored (I won't say turned down because they didn't even bother to answer). They rejected his appeal on the basis that no time to pay arrangement was in force. He now has to decide whether to take the appeal to the First Tier Tribunal.

Do we stand much chance here? Can their failure to respond to his request be treated as contributory negligence on their part or reasonable excuse on his part? I advised him to pay the balance in full immediately to lend credence to his claim that he would have done this straight away had he known, but I don't know whether he has or not.

Comments are welcome from those who have already been down this route or know the legal position. No comments please from anyone who doesn't know or is just guessing/assuming as that wouldn't be much help.




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By cfield
31st Jan 2012 13:26

Sarah Cornes case might be encouraging

Doesn't look like anyone is going to respond to this post now, but the lead article on the AWeb 30/1 bulletin is quite encouraging:

The first-tier tribunal (Sarah Cornes v HMRC [TC01701], heard in November 2011) ruled that the hardship and emotional distress of Ms Cornes and that she had made all reasonable attempts to arrange a time to pay agreement (TTP) with HMRC before the deadline for a surcharge, constituted a reasonable excuse for late payment of tax.

 Can't say there was much hardship or emotional distress in the case of my client (apart from when he got my bill) but the fact that he tried to arrange a TTP well before the deadline may serve him well in appealing his surcharges, if this decision is anything to go by.


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