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	First-tier Tribunal (Tax)
You are here: BAILII >> Databases >> First-tier Tribunal (Tax) >> Art & Soul (Glasgow) Ltd v Her Majesty's Revenue & Customs [2009] UKFTT 49 (TC) (15 April 2009) URL: http://www.bailii.org/uk/cases/UKFTT/TC/2009/TC00027.html Cite as: [2009] UKFTT 49 (TC), [2009] UKFTT 00027 (TC)

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TC00027

Appeal number: EDN/08/192

Belated Notification Penalty; No returns; Calculation based on expected turnover; Mitigation applied for Voluntary Declaration; no reasonable excuse.

FIRST-TIER TRIBUNAL

VALUE ADDED TAX

ART & SOUL (GLASGOW) LTD Appellants

- and -
THE COMMISSIONERS FOR HER MAJESTY'S REVENUE AND CUSTOMS (Value Added Tax) Respondents

TRIBUNAL: Mrs G Pritchard, BL., MBA., WS, Tribunal Judge

Sitting in public in Edinburgh on Tuesday 14 April 2009

No Appearance for the Appellants

Mr Russell Harrison instructed by the General Counsel and Solicitor to HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2009
DECISION
1. This is an appeal against the imposition of a penalty for late registration of the Appellants. I find the facts as undernoted and also give the reasons for my decision.
2. The Appellants are a company which was trading previously and became incorporated as a company on 13.04.07. They realised then they were trading above the limit for Value Added Tax (VAT) and asked their then accountants to apply for registration so as to start making returns. The accountants did not do. Nor did the Appellants themselves.
3. The Appellants became anxious that the registration had not proceeded and appointed new accountants who did apply on 28.03.08 almost one year after the Appellants had appreciated the need for registration. From the application made (VAT 1) it was established that the Appellants ought to have registered on 01.05.07.
4. HMRC recognised the registration as late and demanded that the appropriate penalty be paid. The Appellants wished to blame their accountants for not proceeding as instructed.
5. In terms of the legislation VATA 1994 Section 67(1) provides that where registration is late by more than nine months but less than eighteen months the penalty is 10% of the VAT due. Again using the figures provided to HMRC in the VAT 1 they calculated that sum at £67,735. They granted the full mitigation permitted for a Voluntary Disclosure at 10% and issued the penalty notice in the sum of £5,080. The Appellants were invited to give HMRC their true figures for the first Vat accounting period in a letter dated 29 July 2008. (Corrected later with regard to the required date of registration of 01.05.09).
6. There is provision in the legislation for reconsideration but the Appellants have not responded to HMRC with the appropriate figures for recalculation or indeed responded in any way. They did however apply for an appeal under S83(n) VATA 1994 to be heard and were informed it was today.
7. They have not attended today. I decided to proceed in order to keep this matter going forward for a decision.
8. The reason the Appellants have given for not registering is that their accountants were requested to proceed but did not. Unfortunately reliance on another person has not been regarded as a reasonable excuse for failure in VAT matters. The responsibility for VAT matters lies with the trader. What is acceptable is found in VAT Notice 700 where HMRC accepts that there can be compassionate circumstances such as a death or illness, or where a business is taken over and trading continues using the previous registration with all returns up to date, or if there is some doubt about types of supply. Otherwise it is for the trader to show that he had a reasonable excuse which may be acceptable to the Tribunal.
9. I find that reliance on another person is not a reasonable excuse. In particular here there was delay. This indicates to me that the Appellants were not so concerned as they ought to have been. They could easily have phoned the National helpline who would have made their position quite clear.
10. I therefore refuse the Appeal. I find no expenses due to or by either party.

MRS G PRITCHARD, BL., MBA., WS

TRIBUNAL JUDGE

RELEASE DATE: 14 APRIL 2009