In Derren Urwin v HMRC [2014] TC03145 the First Tier Tribunal (FTT) allowed a taxpayer’s appeal against a surcharge of £429.78 for late payment of tax because:

  • of the delay by HMRC in notifying him that he owed tax, and 
  • there were also “special circumstances” allowing HMRC to reduce the penalty.

The Tribunal also stated that the law covering due dates for payment of tax is complex and may not adequately cover the facts under consideration.

  • The appellant (DU) usually paid the bulk of this tax through PAYE and, whenever there was an underpayment, this was collected by HMRC changing his tax code for the following year. 
  • He presumed this treatment would continue but, for tax year 2009/2010, there was an underpayment of £8,595.79, which could not be collected that way. 
  • DU was unaware of the shortfall until he received a tax return in August 2012, by which time the due date had passed.

The Tribunal held that it was “impossible for him to pay on time” and, therefore, there was a “reasonable excuse” for the delay. Unusually, it also stated that, had this not been the case, there were “special circumstances” (paragraph 9, Schedule 56, FA 2009) allowing HMRC discretion to reduce the penalty, because “even if he was extraordinarily diligent and completed the return and sent it back by return he was already late”.


A victory for fairness and common sense. The FTT pointed out that the law on when payment of tax is due is sufficiently complex for HMRC to have provided DU with two different due dates…one of which was clearly wrong.

Links to our guides:

Appeal: grounds for appeal toolkit

Grounds for Appeal: Taxpayer reasonable excuse

External link:

Derren Urwin v HMRC [2014] TC03145