[2009] UKFTT 359 (TC)

TC00297

Appeal number:  TC/09/10084

Compulsory Registration:  Characteristics of TOGC satisfied.  Appeal refused.

FIRST-TIER TRIBUNAL

TAX 

	JANE WALLACE BROWN	Appellant

	- and -

	THE COMMISSIONERS FOR HER MAJESTY’S
	REVENUE AND CUSTOMS (VAT)	Respondents

			TRIBUNAL JUDGE: 	Mrs G Pritchard, BL., MBA., WS
			(Member):			Mrs Charlotte Barbour, CA., ATII

Sitting in public in Edinburgh on Monday 23 November 2009

Heard on papers for the Appellant

Mr Richard Mansell, 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 a compulsory registration for VAT.  HMRC decided to register the Appellant as a sole trader from 21.04.07 until 31.03.08.  This decision is contained in a letter dated 03.04.09, (P18/19 as below)
2.	A procedural issue arose prior to commencement of the Appeal.  The Appellant had written to the Tribunal advising that she was unable to attend as she could not travel any distance.  She gave no medical grounds.  She provided no medical certificate.  She went on in her letter to request the Tribunal to proceed on her written submissions, which were clear.  She was not intending bringing any witnesses.  The Tribunal considered her request to proceed on her written submissions and decided to proceed in the interests of justice and no delay subject to hearing evidence.  We advised the HMRC representative that we would hear all of the evidence of his witnesses whom he had brought, Gail Ashcroft and Katherine Reid.  We advised that if at any time any evidence gave rise to a query to which only the Appellant might give the Tribunal the answer we might make an adjournment decision.  At the conclusion of the evidence no such issue had arisen.  The decision to proceed was maintained.
3.	Mr Richard Mansell appeared for HMRC.
4.	Oral evidence was given by two officers of HMRC, Gail Ashcroft and Katherine Reid.  Both were credible.  
5.	Written evidence consisted of a Bundle prepared by HMRC which included the Appellant’s appeal and correspondence containing her submissions, as well as HMRC’s Statement of Case, and correspondence and witness statements.  When reference is made to any page it shall be treated as repeated here.
6.	The Appellant’s case was that she had never carried on a business manufacturing blinds at 18 Lochpark, Ayr, her home, as stated in the Statement of Case.  This had however been information she gave to HMRC verbally in a telephone call on 22.02.08.  She also makes further submissions as at P3 of the bundle.  In her appeal letter she stated she had no money and was not making a profit but these issues are not relevant.
7.	HMRC contended that the Appellant had been registered as a Director of Prima Blinds Ltd a blinds manufacturing business until deregistration.  It had ceased to trade on 21.04.07.  VAT 7 deregistration notification was dated 02.05.07.  She had continued making blinds until 31.03.08 when she registered a new blinds making company Express Window Furnishings Ltd with a commencement date of 01.04.08.
8.	From the written and oral evidence we find as follows: 
8.1	Jane Wallace Brown was a director of Prima Blinds Ltd.  She completed a VAT 7 deregistration form Pp33-38 claiming at P36 Box E that Prima Blinds Ltd had ceased to trade.  It owed over £48,000 of VAT.  Prima Blinds Ltd was deregistered on 02.05.07.
8.2	Jane Wallace Brown informed investigating officer Gail Ashcroft on 22.02.08 in a phone call that she had continued trading making blinds at 18 Lochpark, Ayr, her home.  A visit was arranged for 05.03.08.
8.3	The Appellant has a long history with HMRC over a series of VAT regulatory issues, including failure to make returns and other matters.
8.4	On 05.03.08 in the course of a visit to the Appellant’s home Gail Ashcroft and Katherine Reid two officers of HMRC found no books or records available for inspection in respect of the Appellant’s claim to work from home.  The Appellant claimed her trading was below the VAT registration limit.  They asked permission to search for the blinds making machines needed to trade.  They were not on the premises.  The Appellant and her husband had purchased new business premises, and made an arrangement for the officers to call there in the afternoon.
8.5	In the afternoon a visit was made to the new premises.  We find all the manufacturing requirements were situated there at Kyle Road, Ayr, a small industrial unit.
8.6	At a later visit on 03.04.08 limited books and records were produced.  Although an accountant was to have been present, he did not attend.  The Appellant was advised of the TOGC decision and advised of all the paperwork HMRC required.
8.7	The Appellant advised the officers the new business was Express Window Furnishings Ltd which commenced trading from 01.04.08 (almost one year on from her deregistration of Prima Blinds Ltd).  She had not registered for VAT.  Turnover was anticipated as £180,000.  She had traded throughout the deregistration period to the likely new registration period, manufacturing blinds.  A transfer of a going concern (TOGC) had occurred as the whole assets of Prima Blinds Ltd were being utilised by the Appellant who had the same customer base and trading facilities and who then created Express Window Furnishings Ltd to which all the assets, customers, and trading facilities were to be transferred.  When that transfer was completed a further TOGC occurred.
8.8	Further attempts were made to recover paperwork but the Appellant delayed for months, cancelling appointments and making rearrangements, until 10.09.08 when Gail Ashcroft called and received minimal paperwork.  The new company Express Window Furnishings Ltd had been renamed Prima Blinds Ltd.
8.9	Figures for purchases and sales were extracted and calculations made giving a net tax due for the period between 21.04.07-31.03.08 of £3,701.  An assessment was later raised for this amount.  Gail Ashcroft decided compulsorily registration of the Appellant was necessary.
8.10	The registration unit wrote to the Appellant advising of the registration.  The Appellant requested a review, P25.  We considered her grounds had no foundation as she had deregistered Prima Blinds Ltd as found above.  The reply P100 is the letter of 03.03.09 confirming the compulsory registration decision.
Decision
9.	The Appellant did trade as a sole proprietor from 21.04.07 when she deregistered Prima Blinds Ltd to 31.03.08 the day before when Express Window Furnishings Ltd commenced trading.
Reasons
10.	We find two TOGCs occurred, one on 21.04.07 and one on 31.03.08 creating a continuous trading period for VAT purposes.  No relief in respect of trading periods is available to the Appellant who appears to have thought she might go undetected.
11.	Her protestations she continued to trade as Prima Blinds Ltd is untenable in the face of her VAT 7 application to deregister Prima Blinds Ltd.
12.	Her lack of funds and lack of profit are not relevant considerations for VAT purposes relating to Registration.
The Law
13.	The Statutory provisions are:
S49 Value Added Tax Act 1994 (VATA 1994)
S83 VATA 1994 
Schedule 1 VATA 1994
HMRC Public Notice 700/9

MRS G PRITCHARD, BL., MBA., WS
TRIBUNAL JUDGE

RELEASE DATE:    11  DECEMBER 2009