UK FTT upholds levy of penalties despite out of time VAT assessments

Maxxim Residential Design Ltd appealed against HMRC’s “best judgement” assessments and penalties for VAT periods from March 2013 to June 2014.
The UK FTT found that some assessments were out of time, but the penalties were valid due to the wording of Schedule 24 Finance Act 2007.
The phrase “due or payable” was interpreted to mean there was a liability to VAT in earlier periods, even if the tax was not actually payable due to HMRC being out of time to assess.
This outcome may surprise taxpayers negotiating time limitation and penalty assessments with HMRC.