The appellant, Yiannakis Georgiou Polycarpou, appealed against a VAT default surcharge issued by HMRC for £20,165 issued to his company, Polyteck Building Services Ltd.

The due date for the VAT return and payment for the period 03/21 was 7 May 2021. Polycarpou paid VAT between 7 May 2021 and 11 May 2021, by full payment submission (FPS).

However, he later became liable to a penalty at 10% of the outstanding VAT due, as the payment was late.

The total outstanding VAT was £526,656.15 and the penalty charged was £52,665.61. HMRC conducted a review and found that £325,000 had been paid before the due date, so the surcharge was reduced to £20,165.61.

On 5 April 2022, Polycarpou took his dispute to the tax tribunal.