Summary
The appellant appealed against a default surcharge of £70,909.44 (reduced from £95,900 following a voluntary disclosure reducing the VAT due for the period) arising from a one day delay in filing its VAT return and paying the VAT due. The appellant argued that the penalty was disproportionate.
Background
In 2007, HMRC directed the appellant to go onto payments on account. It paid its first two monthly instalment on time and rendered its VAT return on time, but the final balancing payment was received one day late. This also happened in the following quarter, resulting in the imposition of the surcharge. These were the only late returns the appellant had submitted since registering for VAT in 1986.
The Tribunal considered that, as set out in the case of Total Technology, the default surcharge regime, being part of the UK implementation of
