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Was there a reasonable excuse for the submission of two late VAT returns and payments?

By Andrew Needham, May 2025

This was an appeal against HMRC's decision to issue a default surcharge under s 59 VAT Act 1994 for VAT periods ending September 2022 and December 2022. 

The appellant offers mobile catering services to the film industry. However, when the COVID-19 pandemic hit, filming activities came to a stop. The company placed a number of employees on the furlough scheme between April 2020 and August 2020. The company was unable to retain its staff and suffered significant reductions in business. It is against this background that the first default period arose. 

HMRC had imposed numerous default surcharges over a two-year period. The first period of default was the period ending 09/20, with almost all periods between that period and the periods under appeal being considered by HMRC to be in default. Surcharges have been issued for most of those periods but these were not the subject of an appeal. 

Initially, the appellant’s business

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