This was an appeal against default surcharges on the grounds that the Appellant had a reasonable excuse due to insufficiency of funds.
Background
The business commenced trading as a hotel and restaurant in 1990 run by Mr Walton. He subsequently started working closely with an event business run by Mr Collins who ultimately bought into the incorporated business as a 50% shareholder in 2008. At this point Mr Walton moved out of the hotel and became more of a sleeping partner in the business and was unaware of payment problems with HMRC. When he became aware of the problems he bought out has business partner and cleared the existing debts and paid three VAT returns on time.
After he regained full control of the business and was able to pay three consecutive VAT returns on time, for 03/12, 06/12 and 09/12. He was about to do the same for the fourth period, 12/12 when he
