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Agent wins case after HMRC fails to answer the phone

11th Aug 2016
Freelance journalist
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businessman looking sadly at his phone

A business has won an appeal against a fine for late payment of VAT because its tax agent was unable to talk to HMRC on the phone to request more time.

The agent of McNamara Joinery telephoned HMRC on 5 February, two days before the VAT payment was due, to request more time to pay the tax due to the client’s cash flow problems.

However, the agent told the first-tier tribunal (McNamara Joinery Ltd v HMRC, TC05278), that the line kept disconnecting. The agent had the same problem

on 12 February, but finally got through and arranged a two-week extension.

HMRC said that the taxpayer did not have a reasonable excuse for paying the VAT late and charged him a penalty of £490.

Tribunal decision

The tribunal said that a reasonable excuse is normally an unexpected event, something unforeseeable, something out of the appellant’s control.

Insufficiency of funds is not regarded as a reasonable excuse, but the tribunal said that the business and its agent did all they could to contact HMRC about the problem.

The tribunal said it did not accept HMRC’s submission that the business and its agent should have been aware that there was a strong likelihood that there would be a large volume of calls being made to the respondents on the days immediately prior to the due date and that as a result the appellant and agent could reasonably have expected delays in being able to make contact.

“HMRC does not publish times when their lines are likely to be busy. Rather than expecting delays it is reasonable for a taxpayer to expect telephone calls to HMRC to be answered without delay.”

The tribunal agreed with HMRC’s comment that the “time to pay agreements” should be made on or before the due date. But the tribunal also said that if a taxpayer is unable to make contact with HMRC before the deadline “that must be worthy of consideration as a reasonable excuse for the late payment.”

Replies (6)

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By Tom 7000
12th Aug 2016 12:05

I wonder what you charge a client to go to a tribunal? save £490

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Replying to Tom 7000:
By tonyglasbey
15th Aug 2016 18:21

Tom, even if they charged £490, it would be worth it for the client to avoid getting into or further up the 12-month default surcharge period, don't you think? As the client was having cash flow problems a further default in 12 months is not unlikely.

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By miketombs
12th Aug 2016 12:13

This has to be the best post of the week! I genuinely feel sorry for HMRC trying to cope with staffing level cuts whilst struggling with things like answering calls, but even if they hit their targets the performance would be unacceptable. Answering 85% of calls within 6 minutes is hardly a stretch - what about trying for 90% within 1 minute? - and clearing 95% of post within 40 days seems out of kilter with their expectations of how quickly their 'customers' should react. I've had basic queries like requests for refunds of tax left hanging for over a year, whilst if payments to HMRC were a year late they would be applying to make the taxpayers bankrupt.

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Replying to miketombs:
By rememberscarborough
12th Aug 2016 14:56

Maybe they could start with allowing their staff to see what we can on our online accounts? If they could then the five phone calls I had today could have been cleared up with one....

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Replying to miketombs:
By swatt66
15th Aug 2016 18:53

Unlikely they will reach a 1 minute response time as you have to listen to a recorded message for 2 minutes.

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By AndrewV12
19th Nov 2016 15:14

To be fair to be fair, everyone knows if you dont call a Government agency before 10am your batting on a sticky wicket. However some HMRC phone line-times are out of date.

Well done for giving it a go, however more important are matters like form filling, what happens if you cannot contact HMRC or no one at HMRC can help you. It has to be a reasonable excuse.

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