[17]On behalf of HMRC, Mr Reeve argued that:(i) Section 108 of the 2009 Act governs all arrangements for late payment of tax, so it is irrelevant how the agreement is described. There is no other legislative authority in reliance upon which HMRC could enter into a deferred payment agreement;(ii) The only basis for the Tribunal to set aside the surcharges would be if it found that Mr Foster had a reasonable excuse for breaching the agreement. An insufficiency of funds in his bank account is not a reasonable excuse by virtue of s 59 C (10) of the 1970 Act. Mr Foster is expected to be aware of his tax affairs and to ensure that funds are available to meet his liabilities to HMRC;(iii) Whilst the letter to Mazars refers only to consideration of cancellation in the event of a missed payment, the legislation itself makes clear that the surcharge is only suspended during the agreement and that breach of the conditions would make it payable. Mr Foster was professionally advised and the e mail of 21 March 2011 exhibited at B22 of the hearing bundle shows that Mazars had understood the legislative position to be that the surcharge would not be applied so long as payment was made as per the payment plan;(iv) The legislation gives HMRC no discretion at the point where an agreement has been breached. If Mr Foster had contacted HMRC and explained his difficulties a new arrangement could have been reached, as permitted by the legislation;(v) The HMRC officer had reasonably concluded that there was nothing to be gained from contacting Mr Foster before cancelling the agreement. There is a discretion to do so but no requirement. In relation to the letter of 14 December, the records show that it was sent, so it was duly served. That letter was the “second letter” which is the cancellation of agreement letter, so it would not have been possible for Mr Foster to remedy the situation even if he had received it because the surcharges had already been trigged at that date by the missed payment;(vi) The default is not contested in this case and so unless there is a reasonable excuse for non payment the Tribunal must uphold the surcharges. The Tribunal’s Conclusions 18. The Tribunal has considered all the evidence and arguments very carefully. As we explained to Mr Beattie, the only statutory basis for setting aside the surcharges is the “reasonable excuse” ground. We note that Mr Foster had insufficient funds in his current account to meet the direct debit payment on 30 November but that he apparently had access to funds elsewhere. On that basis, it does not seem to us that this case falls squarely within s 59 C (10) of the 1970 Act, which rules out insufficiency of funds as an excuse for non payment. 19. That said, we do not accept that a tax payer’s difficulties with cash flow and with his bank can constitute a reasonable excuse for no payment either. Mr Foster is a sophisticated business man who can be expected to pay attention to his financial affairs and the fact that a payment might be missed if he retained insufficient funds in his current account should have been obvious to him, especially in circumstances where the consequences of missing a payment would be serious. 20. Mr Beattie attacked HMRC’s processes on grounds of procedural unfairness. As we explained to him, this was not in itself a ground for setting aside the surcharge. We note that HMRC had discretion to contact Mr Foster or to cancel the payment and that it exercised its discretion in favour of cancelling the agreement. Whilst recognising that in circumstances where article 6 of the European Convention apply, HMRC must show due process and that the penalties are properly imposed, we note that the letter of 14 December 2010 (which, we accept, Mr Foster did not receive) was one which cancelled the agreement and not one which asked him to remedy the missed payment in order to restore the agreement. In these circumstances it is irrelevant to this appeal that Mr Foster did not receive it. 21. We have some sympathy with Mr Foster who had, after all, made the majority of the payments before the missed payment triggered the imposition of the surcharges. We note, however, that the legislative framework approved by Parliament is designed to be punitive and to deter missed payments. In those circumstances we reject Mr Beattie’s arguments as to unjust enrichment.[22]Finally, although the point was not specifically argued before us, we have considered whether the penalty in this case might be thought to be disproportionate so as to offend European law. We have considered the decisions in Enersys Holdings UK Ltd v HMRC [2010] UKFTT 20 (TC) and Total Technology (Engineering) Ltd v HMRC [2011] UKFTT 473 (TC) . We note that the test applied in those cases was whether the penalty was “ not merely harsh but plainly unfair”. In Total Technology it was noted that this test sets a high threshold before a court or tribunal can find that a penalty, correctly levied on the tax payer under legislative provisions conferred by Parliament, may be struck down as disproportionate. We conclude that the penalty imposed on Mr Foster in this case is indeed harsh, but is not so unfair as to enable this Tribunal to strike it down as unlawful.23. For the above reasons, we now dismiss this appeal.24. This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. TRIBUNAL JUDGE RELEASE DATE: 10 April 2012