VAT surcharges on mistakes

[Kitty Kat]

A client has been charged a sizeable surcharge due to a third default.

The first was them just forgetting, slapped hands, move on and learn. The second was that they put the wrong number on the payslip and so underpaid. HMRC wrote to tell them and they paid the balance that day. 2% surcharge was under £400, so nothing more said.

They then set up a DD to avoid a repeat of the above, but they set the DD up on the 12th, submitted the return on the 13th and expected the payment to go out on the 7th of the next month. Only HMRC said because he submitted the return within 5 days of setting up the DD they didn't take any money, so a further default. Again, on being told, the client paid the amount that day.

The client does their own VAT so is doing their own appeal, but has run it by me to check. HMRC seem technically correct, but the client has been as helpful as they can be (albeit also slightly dozy and unlucky) and thought everything was sorted each time. There is no technical thread to pull at, as late is late and the HMRC site does indeed say 5 days from set up to submission, but that is just penalising the client for submitting their return early in this case!

Mildy peeved, so sorry for the rant, but I'd welcome opinions as to whether HMRC will bend on this.

As always, thanks all.

[robbob]

Hello Kitty

I think the following linked case was appealed successfully on the basis that the surcharges levied were disproportionate - see link
http://www.taxbar.com/Enersys_Holdings_ftt.pdf.pdf

Summary in relation to this ruling taken from random website
http://www.wyliebisset.com/cgi-bin/item.cgi?id=32349&d=195&h=160&f=260

[Generix]

A client has been charged a sizeable surcharge due to a third default.

The first was them just forgetting, slapped hands, move on and learn. The second was that they put the wrong number on the payslip and so underpaid. HMRC wrote to tell them and they paid the balance that day. 2% surcharge was under £400, so nothing more said.

They then set up a DD to avoid a repeat of the above, but they set the DD up on the 12th, submitted the return on the 13th and expected the payment to go out on the 7th of the next month. Only HMRC said because he submitted the return within 5 days of setting up the DD they didn't take any money, so a further default. Again, on being told, the client paid the amount that day.

The client does their own VAT so is doing their own appeal, but has run it by me to check. HMRC seem technically correct, but the client has been as helpful as they can be (albeit also slightly dozy and unlucky) and thought everything was sorted each time. There is no technical thread to pull at, as late is late and the HMRC site does indeed say 5 days from set up to submission, but that is just penalising the client for submitting their return early in this case!

Mildy peeved, so sorry for the rant, but I'd welcome opinions as to whether HMRC will bend on this.

As always, thanks all.

I have a friend who specialises in getting SLNs overturned by using technicalities, not really my thing so never done much work with them; however, doesn't sound like it applies to you as it sounds like all the notices were issued and received properly and there is little cause to go back on re mitigating circumstances etc.