The case of D R Sudall was decision without a Hearing, a so-called ‘paper case.’ It is just one in the series of Donaldson cases, which deals with the issue of daily penalties for failure to submit a tax Return; so, not a VAT case. But, it does address the question of a reasonable excuse defence, which applies to VAT and many other taxes.
The significant point (in para 22) is that, where any Return is submitted late, a reasonable excuse defence can only be effective where there is a reasonable excuse for the initial failure to submit.
The converse is where the taxpayer does not have a reasonable excuse at the date the Return was required to be submitted. Subsequent events cannot provide a reasonable excuse for additional penalties.
I am not convinced that other Judges will follow this, but it will be interesting to see how this line of decision develops.
The decision is here: http://financeandtax.decisions.tribunals.gov.uk//Aspx/view.aspx?id=9837
About Les Howard
Hi, I am a VAT Consultant, working mainly with charities. I am based in Cambridgeshire
I have over 20 years experience in VAT, and am currently also a part-time member of the Tax Tribunals.