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Specific Causes Of Cashflow Difficulties Were Reasonable Excuse For Late Payment

By Mark McLaughlin, July 2016
Summary

Economic downturn and bad debts did not amount to reasonable excuse in the context of penalties for the late payment of PAYE, but certain specific causes for the appellant’s shortage of funds constituted reasonable excuse, and its appeal was allowed in part.

Background

The appellant, a charitable company limited by guarantee, operated a school and was registered for PAYE purposes in respect of its employees. It made late payments of PAYE income tax and National Insurance contributions for the tax year 2012/13. 

The school suffered ongoing financial difficulties, and had a deficit accumulated over a three year period. The school had no access to any short-term bank overdraft facilities. 

A principal benefactor of the school had pledged funding to assist with the school’s working capital
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