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  • Adnan Khalid

Covid-19 not a reasonable excuse for late payment of tax - Prime Aesthetics Limited v The Welsh Reve

In Prime Aesthetics Limited v The Welsh Revenue Authority [2020] TC07948, the First Tier Tribunal (FTT) dismissed the penalty appeal on the grounds that there was no reasonable excuse attributable to COVID-19.


The taxpayer purchased a Little Chef restaurant and Travelodge hotel for £3.21m on 6 December 2019. The land transaction return submitted on 12 December showed tax due of £171,100 that was due and payable on 5 January 2020. However, the tax remained unpaid at the time of the appeal hearing (24 August 2020).

On 4 February 2020, the Welsh Revenue Authority (‘WRA’) issued a penalty in the sum of £8,555, representing a penalty of 5% of the tax due. The taxpayer appealed the penalty citing three reasons for non-payment:

  1. The director had to urgently travel to abroad and due to Covid restrictions was unable to transfer funds

  2. A loan application made to the bank has been put on hold due to Covid

  3. Due to the closure of hotels under the lockdown restrictions, tenants withheld rental payments

The taxpayer argued that these conditions were out of his control and asked for a further six months in which to pay the tax.

The tribunal agreed with the WRA in that the lockdown restrictions took effect in Wales from 16:00hrs on 26 March 2020. Each of the three circumstances advanced by the appellant therefore occurred sometime after the penalty date.

In addition, for an insufficiency of funds to constitute a reasonable excuse, it had to be attributable to events outside the taxpayer’s control. The appellant should have been aware that tax would be payable in January 2020. Sufficient funds to pay the tax should have been in place in good time.


The tribunal concluded that the facts and reasons citied by the taxpayer did not constitute a reasonable excuse and that the penalty of £8,551 had been correctly charged. The appeal was dismissed.

The taxpayer should have applied to the WRA to pay the tax in instalments as was pointed out in the hearing. This may have even avoided the penalty. The decision can be viewed here.

Please feel free to contact us if you are considering appealing a penalty for non-payment of tax . Our tax specialists at Integritax Accountants are available to ensure you are as tax efficient as possible, and to assist you in keeping the necessary records to satisfy HMRC.

For more information, please contact us on 0121 663 1890 or email

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