This decision was overturned by the Upper Tribunal.

In Trinity Mirror PLC v HMRC TC03490, a newspaper was successful in appealing a £70,900 late filing VAT penalty on the grounds of proportionality.

  • The company filed its quarterly VAT return on day late in 2008. It had filed a return one day late six months earlier and the second default resulted in an automatic 2% VAT default surcharge.
  • The company lodged an appeal relying on the principle of proportionalty contained within the EU VAT Directive "...a penalty must not be disproportionate to the gravity of the infringement …”. The company had a strong compliance record.
  • HMRC argued that the penalty was necessary to discourage large companies from late filing.

The Tribunal held that the fine was unfair and an excessive punishement for a minor infringement. 

There is no power in section 29 VATA 1994 which allows the Tribunal to mitigate or otherwise reduce the amount of this type of surcharge and so a discharge of the total penalty is the only possible course open to the Tribunal which concludes that the penalty is disproportionate.


Trinity Mirror v HMRC

Useful judgments on this topic to bookmark:

Total Technology v HMRC

 Enersys Holdings UK Ltd v. Revenue and Customs Commissioners [2010] UKFTT 20 (TC).



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