Newspaper publishing group Trinity Mirror is facing a £70,900 VAT late payment surcharge, after the Upper Tribunal (UT) reversed an earlier First Tier Tribunal (FTT) decision that that the penalty was disproportionate given that the payment was only one day late
Trinity Mirror originally took its case to the FTT after being asked by HMRC to pay £70,906.44 for the failure, by one day, to file a VAT return and pay the VAT due in respect of a balancing payment for the VAT quarterly period ended 30 December 2007.
The FTT found in the company’s favour, arguing that the surcharge, which had been levied at the rate of 2% on a net under-payment of VAT of £3,545,324, was disproportionate. The tribunal suggested there was a ‘hierarchy of penalties’, with this single default by an otherwise compliant taxpayer at the low end.
The FTT took the view that the surcharge ‘went beyond what was strictly necessary for the objectives pursued and was excessive in view of the gravity of the infringement such that it imposed a disproportionate burden on Trinity Mirror’.
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