[F127(1)A person who would otherwise have been liable to a surcharge under paragraph 26(1) is not to be liable to the surcharge if the person satisfies the Commissioners or, on appeal, the tribunal that, in the case of a default which is material to the surcharge—U.K.
(a)the non-UK return or, as the case may be, the VAT shown on that return, was despatched at such a time and in such manner that it was reasonable to expect that it would be received by the tax authorities for the administering member State within the appropriate time limit, or
(b)there is a reasonable excuse for the return or the VAT not having been so despatched.
(2)Where sub-paragraph (1) applies to a person—
(a)the person is treated as not having been in default in respect of the tax period in question, and
(b)accordingly, any special surcharge liability notice the service of which depended on that default is regarded as not having been served.
(3)A default is “material” to a surcharge if—
(a)it is the default which gives rise to the surcharge, under paragraph 26(1), or
(b)it is a default which was taken into account in the service of the special surcharge liability notice on which the surcharge depends and the person concerned has not previously been liable to a surcharge in respect of a tax period ending within the special surcharge period specified in or extended by that notice.
(4)A default is left out of account for the purposes of paragraphs 25(4) and 26(1) if—
(a)the conduct by virtue of which the person is in default is also conduct falling within section 69(1) (breaches of regulatory provisions), and
(b)by reason of that conduct the person concerned is assessed to a penalty under that section.
(5)If the Commissioners, after consultation with the Treasury, so direct, a default in respect of a tax period specified in the direction is to be left out of account for the purposes of paragraphs 25(4) and 26(1).
(6)Section 71(1) (meaning of “reasonable excuse”) applies for the purposes of this paragraph as it applies for the purposes of sections 59 to 70.]
Textual Amendments
F1Sch. 3BA inserted (with effect in accordance with Sch. 22 paras. 23, 24 of the amending Act) by Finance Act 2014 (c. 26), Sch. 22 para. 1