HMRC penalties – Disproportionate?

A recent VAT Tribunal case Enersys Holdings UK Ltd has highlighted the potential to revisit penalties charged by HMRC where the penalty is disproportionate to the error made.

In this case the taxpayer, who had non-standard tax periods, submitted a VAT return one day late due to an error in determining the correct date for submission and received a penalty of £131,881!! The taxpayer appealed and the Tribunal held that the penalty was disproportionate to the error and should therefore be discharged.

If you have received a default surcharge penalty, which seems unreasonable in comparison to the error made please discuss this with us as it may be possible to make a fresh approach to HMRC in the light of this case.

Have a good day!

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