- Recent First Tier Tribunal case highlighted complexities of reasonable excuse in VAT filings
- Sandra Krywald penalized by HMRC for late submission and payment of VAT returns
- Outsourced bookkeeper classified as vulnerable person due to Covid-19 pandemic, leading to late and incorrect figures in VAT return
- New bookkeeper declined to complete work, uncertainty about original figures
- Krywald proactively contacted HMRC, received incorrect advice about opening balances
- Krywald sought help from third-party VAT specialist and new bookkeeping firm to correct errors
- FTT found Krywald had reasonable excuse for late submission due to proactive actions
- Incorrect advice from HMRC considered special circumstances that nullified penalties
- Importance of acting on mistakes in VAT filings, taking reasonable care as mitigating factor
- Negligence from outsourced bookkeepers can be viewed as reasonable care if proactive measures are taken
- Obligation to ensure timely VAT submissions rests with VAT registered person, not bookkeeper
- Precedence set regarding special circumstances, incorrect advice from HMRC can remove penalties if it impacts VAT return preparation and submission.
Source: saffery.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
