In James Hillis v HMRC [2013] TC02611 a penalty for failure to notify liability for VAT was quashed by the FTT: HMRC failed to consider the compliance intention of the law.

  • A solicitor setting up a new practice failed to realise that turnover for VAT registration purposes should be calculated on a rolling basis. He was late in registering for VAT as a result.
  • HMRC issued a late registration penalty under schedule 41 FA 2008.
  • The taxpayer appealed he claimed that he had made an honest mistake and that there were special circumstances.

The FTT quashed the penalty: it was satisfied that HMRC’s decision on special circumstances in the appeal was flawed in that HMRC did not consider whether the penalty met the clear compliance intention of the law having regard to the Appellant’s individual circumstances.


How to appeal a tax penalty (subscriber version)

James Hillis v HMRC [2013] TC02611



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