In a case which emphasised the importance of promptness, and that unfamiliarity with the law is no excuse, a church social club which lodged appeals against penalties imposed for its ‘entrenched’ late payment of VAT has had its hopes of getting its money back dashed by the First-tier Tribunal.
The club had for many years been engaged in lengthy correspondence with HM Revenue and Customs (HMRC) in respect of repeated delays in paying its VAT. It challenged no less than 23 default notices, the earliest of which dated back to 1988, after a new broom had finally brought order to its affairs.
The club argued that it deserved credit for paying off its tax arrears and that it had in the past been badly hit by recession and unexpected events that damaged its cash flow. As a small, non-profit making, organisation attached to a church, the club was ‘not particularly aware’ of the law relating to tax appeals.
However, in dismissing the appeal, the Tribunal noted, “There are very good public policy reasons why late appeals are not routinely accepted. Promptness in appealing matters is very important. Persons, including government bodies such as HMRC, are entitled to rely on the legal effect of their actions if not litigated properly.”
The club’s explanations for its long history of late payments were ‘vague’ and the fact that it had now put its affairs in order and agreed a payment plan with HMRC, ‘whilst laudable’, could not amounted to a ‘reasonable excuse’. Although some of the club’s appeals had been lodged only a matter of weeks out of time, the Tribunal observed, “Nevertheless, late is late.”