Roderick
Cordara QC and David Scorey instructed by PricewaterhouseCoopers for the Appellant
Kenneth
Parker QC and Peter Mantle instructed by the Solicitor for the Customs and Excise
for the Respondents
- This
is an appeal by Courts plc against an assessment dated 16 December 1999 originally
in the sum of £5,347,275. The Appellant was represented by Mr Roderick Cordara
QC and Mr David Scorey, and the Commissioners by Mr Kenneth Parker QC and Mr Peter
Mantle.
- The
issue in this appeal is the validity of the assessment as a "protective assessment"
made after the Court of Appeal had decided Primback in favour of the taxpayer
on the basis that the Commissioners wanted to preserve their position with regard
to time limits for assessing in the event that they won in the House of Lords,
which they did following a reference to the European Court of Justice. The Appellant’s
case in outline is that the protective assessment is not an assessment at all
because it was never processed; alternatively, if it were a valid assessment it
was effectively withdrawn by subsequent assessments. There is no previous authority
in the courts on protective assessments.
- We
heard evidence from Mr Ron Scott, policy manager leading the Commissioners’ team
with responsibility for technical aspects of VAT assessments, and Mr Peter Gurd,
the officer responsible for the Appellant.
- Section
73 of the VAT Act 1994 provides:
"(1)
Where a person has failed to make any returns required under this Act (or under
any provision repealed by this Act) or to keep any documents and afford the facilities
necessary to verify such returns or where it appears to the Commissioners that
such returns are incomplete or incorrect, they may assess the amount of VAT due
from him to the best of their judgment and notify it to him.
…
(9)
Where an amount has been assessed and notified to any person under subsection (1)…above
it shall, subject to the provisions of this Act as to appeals, be deemed to be
an amount of VAT due from him and may be recovered accordingly, unless, or except
to the extent that, the assessment has subsequently been withdrawn or reduced."
- It
is necessary to set out at the beginning the normal method of making an assessment.
We were shown the Commissioners’ internal guidance about making assessments. The
process starts with a form VAT 641 which contains the trader’s name and registration
number and the officer’s name. There are then ten lines for assessing different
periods (a continuation sheet exists if more than ten periods are assessed) containing
details of the period, an attribution code for the type of assessment (such as
output, or input, tax error), the amount of the assessment, various other codes
(type, method and reason), and two columns enabling a misdeclaration penalty and
interest to be inhibited. The guidance for completing form 641 is contained in
Table 34 comprising 24 bullet points. The final section of Table 34 deals with
processing the VAT 641. The form is sent for batching and keying. The form is
then processed by the computer which automatically calculates interest and penalties.
A number of checks are carried out which can result in the VAT 641 being rejected.
The computer generates the familiar Notice of Assessment on form VAT 655, which
is technically notification of the assessment. The trader’s file is updated with
the information which then appears on the ledger containing details of the financial
position between the trader and the Commissioners.
- The
guidance contains a paragraph (1.82) about making a protective assessment saying:
"The
making of such an assessment will protect our position in these circumstances
[subsequent appeal being decided in favour of the Commissioners]. These assessments
should be made and notified in the normal manner with an explanatory letter to
the trader. In correspondence with the trader, you should not refer to these assessments
as ‘holding’, ‘potential’ or ‘ protective’ assessments."
A
subsequent paragraph explains that such phrases could render an assessment invalid
as traders could construe that the assessment had not been made to the best of
the Commissioners’ judgment.
Facts
found
- We
set out our findings of fact in relation to the various assessments or alleged
assessments:
- 16
December 1999. Mr Gurd had received advice in the form of an email dated 22 October
1999 through his line manager from Richard Excell of Retail COPE to make an assessment
in Primback cases. Mr Excell’s email had been sent to a number of VAT offices
throughout the country. The advice was to make an assessment, leaving it on the
file without processing it and send only a covering letter in a form contained
in draft guidance TA [temporary amendment] 2/99. He regarded this as advice rather
than instruction but he followed it. It was unusual advice and he would not have
acted in this way, or at all, but for the advice. On 16 December 1999 he completed
a form VAT 641 for the eight periods 12/97 to 09/99 (the Eight Periods) in the
total amount of £5,347,275. The attribute code showed that it was an output tax
error, and the type code showed it was an underdeclaration of tax. Misdeclaration
penalty was not inhibited, which suggests that Mr Gurd did not consider it as
the Appellant then had a Court of Appeal decision in its favour and would be bound
to have a reasonable excuse for the underdeclaration. The form was signed and
dated by Mr Gurd on 16 December 1999. It was checked by another officer who wrote
his name in capitals and dated it the same date. It was stamped with the office
date stamp the same date. No counter signatory was obtained, and none was necessary
in the circumstances. The form 641 was not sent for processing and all copies
remained on the Appellant’s file. On the same date, Mr Gurd wrote to the Appellants
saying that assessments had been made under section 73 of the VAT Act 1994, giving
details of the periods and amounts. The letter went on to say:
"The
Commissioners are appealing the Court of Appeal decision in the case of Primback
Ltd to the House of Lords and the above assessments will be enforced if the Court
of Appeal’s decision is not upheld. Default interest will also be charged from
the date the amounts were credited to your VAT accounts until the date of repayment."
The
letter mentioned the right of appeal and said that if the Appellant appealed the
Commissioners would apply to have the case stood over until the House of Lords
decision was known. The Appellant appealed on 7 January 2000.
- 25
May 2000. An assessment was made for the Eight Periods plus two periods before
and two after. The figures assessed for the Eight Periods were lower than those
assessed on 16 December 1999. The normal assessing procedure was followed with
a form VAT 641 being processed to generate a form VAT 655 in the total sum of
£1,591,483. The reason for the assessment was that Mr Gurd discovered an error
in the Appellant’s method of apportioning a credit charge to exempt sales. This
resulted in output tax underdeclared for period 6/99 which he exrapolated to other
periods. This sum does not depend on the result of Primback and is due
whatever the final result in that case.
- 29
June 2000 (amendment of assessment). The Appellant discussed the actual figures
for each period rather than the extrapolated figures with Mr Gurd who agreed revised
figures for the 25 May 2000 assessment. This resulted in lower figures being assessed
for the two periods before and after the Eight Periods and the seventh and eighth
of the Eight Periods. This was done by the normal amendment procedure involving
Form VAT 643 rather than 641 and resulting in a Form VAT 656 rather than 655 showing
the amended figures.
- 29
June 2000 (new assessment). In relation to the first six of the Eight Periods
the revised figures were higher than those assessed on 25 May 2000 which accordingly
required the making of a new assessment for the additional amounts. This was done
in the normal way with a Form VAT 641 resulting in a Form 655.
- 6
July 2000 (amendment). Mr Gurd sent a letter headed amendment to notice of assessment
showing revised figures for the Eight Periods, being the originally assessed figures
less the figures assessed on 25 May 2000 as increased by the 29 June 2000 new
assessment in respect of the first six periods, and as reduced by the 29 June
2000 amendment in respect of the last two. The letter is in the same terms as
the 16 December 1999 letter. No form VAT 643 was produced to us and nothing was
processed. Since this was not processed one would expect to find the form on the
file if it existed.
- 6
July 2000 (new assessment). The same letter notified Primback assessments
for the two subsequent periods (12/99 and 3/00). No form VAT 641 was produced
to us and nothing was processed. Since this was not processed one would expect
to find the form on the file if it existed. Mr Gurd thought he would have completed
one but could not explain its absence. No appeal against this assessment is before
us and we do not need to decide about its validity.
- 25
March 2001. Mr Gurd sent a further letter stating that the Commissioners had assessed
three further periods (6/00, 9/00 and 12/00) and containing the same information
about not enforcing the assessments pending the House of Lords decision in Primback
as had been contained in the 16 December 1999 letter. No form VAT 641 was
produced and nothing was processed. Since this was not processed one would expect
to find the form on the file if it existed. As before Mr Gurd thought he would
have completed one but could not explain its absence. No appeal against this assessment
is before us and we do not need to decide about its validity.
- 15
May 2001. The European Court of Justice decided Primback in favour of the
Commissioners.
- 22
November 2001. A recovery assessment was made for periods 12/95 and 3/96 under
section 80(4A) for which a form VAT 641 was completed. We do not think that this
has any bearing on the case.
- 27
November 2001. Mr Gurd wrote to the Appellants referring to the assessments of
16 December 1999, 6 July 2000 and 23 March 2001 stating the European Court of
Justice had decided Primback in the Commissioners’ favour and asking for
payment of the sum assessed of £5,426,396. The letter also said that they could
have the matter reconsidered or could appeal within 30 days. An internal document
contained a specimen letter on which this is based, although the paragraph about
reconsideration and appeals is not contained in the specimen. It also stated that
the Form VAT 641 should now be processed: "This is an accounting mechanism
only to update the trader’s accounting file."
- 19
December 2001. On 23 November 2001 Mr Gurd completed a form VAT 641 for the figures
for the Eight Periods as in the 6 July 2000 letter, the subsequent two periods
as in the same letter, and the further three periods as in the 25 March 2001 letter.
The total is £5,426,396. The form is signed by a check officer on 27 November
2001 and countersigned by a third officer on 27 November 2001 because this form,
unlike the 16 December 1999 form in respect of the Eight Periods, inhibited the
misdeclaration penalty which means that a countersignature is required. It will
be seen that Mr Gurd’s letter to the Appellant at (10) above was sent on the same
date as the additional signatures to the Form VAT 641 were obtained. This form
was processed and resulted in a Form VAT 655 appearing to be a new assessment
for these periods. By letter of 11 June 2002 the Commissioners’ Solicitor’s Office
stated that the Form 655 had been sent in error and was withdrawn.
- 14
January 2002. Assessments were made on Primback grounds for two further
periods (3/01 and 6/01). We do not think that this has any bearing on the case.
Do the 16 December 1999 documents constitute an assessment?
Contentions
of the parties
- We
shall start by considering the 16 December 1999 documents in isolation. Mr Cordara
QC for the Appellant contends that the 16 December 1999 documents do not constitute
an assessment because first, Mr Gurd did not make any decision to assess; he merely
followed the guidance in Mr Excell’s email of 22 October 1999. Secondly, the form
VAT 641 was not processed and did not therefore result in any change on the Appellant’s
ledger showing a debt due to the Commissioners. He points to section 73(1): "[the
Commissioners] may assess the amount of VAT due from him to the best of their
judgment and notify it to him" and section 73(9) "Where an amount had
been assessed and notified to any person under subsection (1)….above, it shall,
subject to the provisions of this Act as to appeals, be deemed to be an amount
of VAT due from him and may be recovered accordingly…." By not recording
the assessment on the Appellant’s ledger the Commissioners did not act in such
a way as to show that tax was due. His case is also that what was done does not
comply with the guidance, in particular paragraph 1.82 quoted above. He says that
this was a speculative assessment conditional on future events and did not give
rise to an enforceable debt due to the Commissioners. An assessment implies that
the tax must actually be due. He relied on two Australian authorities, Federal
Comr of Taxation v S Hoffnung & Co Ltd [1928] 42 CLR 39, in which an assessment
described as "tentative" was held not to be an assessment; and Bagatol
v Federal Corm of Taxation [1963] 109 CLR 243, in which an assessment was
described as a process producing a legal effect. He also contends that the later
events, particularly the assessment of 16 December 2001 show that the Commissioners
do not regard the 19 December 1999 document as an assessment as they went through
the full procedure for assessment of the same Eight Periods.
- Mr
Parker QC for the Commissioners contends that there is a completed form VAT 641
relating to the Eight Periods which is the evidence of the assessment coupled
with notification of it to the Appellant stating that there was an assessment
but that it would not be enforced. The effect was to create an immediate debt
due to the Commissioners which they made clear that they would only enforce in
the won Primback in the House of Lords. The words "may be recovered"
in section 73(9) showed that the Commissioners had a discretion whether to enforce
the assessment, which they use, for example, in agreeing to accept payment of
an assessment by instalments. It was a valid assessment notwithstanding that it
had not been processed and nothing appeared on the Appellant’s ledger in respect
of it. The ledger was not conclusive as to the amount due. It was convenient to
keep protective assessments off the ledger to stop enforcement of them by mistake.
He said that the Australian authorities did not assist the Appellant: there was
nothing tentative about the assessment, and it was intended to make a definite
sum due.
Reasons
for our decision
- Surprisingly
it is unclear what constitutes an assessment. Lawrence Collins J considered the
question in Cheesman v Customs and Excise Comrs [2000] STC 1119 and concluded:
"Assessment
of VAT is an important step, and it is unsatisfactory that the process is not
transparent, and not defined by legislation or even by clear administrative practice.
But I do not, on the unusual facts of this case, have to decide on the mechanism
by which an assessment becomes complete, as it might be necessary to decide in
a case where a time limit falls in the course of completion of the Form 641 process
and the generation of the notice of assessment."
It
becomes material to decide what is a complete assessment in this case. It is common
ground that there is a distinction between the decision of the Commissioners to
make an assessment, the making of the assessment and the notification of the assessment.
The taxpayer sees only the notification. As Lawrence Collins J said in Cheesman
at paragraph 21 "The conclusion that there is a distinction between assessment
and notification does not answer the question of what an assessment is and when
it is made." He considered direct tax cases on assessment and concluded in
paragraph 26 that they recognise that the practice of the tax authority as to
when the process is complete is relevant. So far as notification of an assessment
is concerned the minimum requirements are that it should state in unambiguous
and reasonably clear terms (a) the name of the taxpayer, (b) the amount of tax
due, (c) the reason for the assessment, and (d) the period of time to which it
relates, see House v Customs and Excise Comrs [1994] STC 211 at 223h-j
and 226j-277a, per May J.
- Protective
assessments, which are not a different type of assessment but a normal assessment
made in particular circumstances, are required to keep time limits open where
decisions in other cases are under appeal where eventually the court will declare
what has always been the law. This is particularly necessary now that there is
a three-year time limit for assessing. The Tribunal has also held in DFS Furniture
Company plc v Customs and Excise Comrs (2002) VAT Decision No.17,818 that
the European Court of Justice decision in Primback was not "evidence
of facts" enabling time limits to be extended. The only way in which the
Commissioners can keep time limits open is accordingly to made a protective assessment.
- We
do not think that there was any substantial disagreement about the legal principles;
the disagreement is on the application of them to the facts of this case. On Mr
Cordara QC’s first point, that there was no decision to assess, Mr Gurd followed
the guidance in the email and completed and signed the form VAT 641. Without the
advice he would never have taken any action, and, even if he had, it would not
have been to act in the way he did without having the Form VAT 641 processed.
We see no reason for saying that this did not constitute a decision by the Commissioners,
although split between two persons, to make an assessment.
- On
Mr Cordara QC’s second point it is common ground that an assessment must create
a debt to the Commissioners, but that the debt need not be immediately enforceable.
Indeed, formerly income tax assessments needed to be made before the due date
in order to obtain payment on the due date. Even the requirement that the debt
should be definite must be subject to qualification if assessments are made on
alternate bases, which have been accepted as valid in many direct tax cases, such
as IRC v Wilkinson [1992] STC 454 at 547e per Scott LJ: "It
is established, therefore, that there is nothing objectionable in principle about
alternative assessments." Although less common they have been accepted in
relation to VAT by the Tribunal in University Court of the University of Glasgow
v Customs and Excise Comrs. (2001) VAT Decision No.17,444. In the case of
alternative assessments, the tax authority intends that at least one of them creates
an immediate debt but it does not know which.
- Essentially
Mr Cordara QC says that the 16 December 1999 documents did not create a debt because
they depended on the outcome of the Primback litigation, while Mr Parker
QC says that there is a debt but that it was not then enforceable. The existence
of the assessment on the Appellant’s ledger would obviously be good evidence of
the assessment creating a debt but it was not there because the form VAT 641 was
not processed, which Mr Cordara QC points out is part of the guidance contained
in Table 34 for the making of an assessment. Mr Parker QC points out that Table
34 starts with a statement that "Tax assessments are processed by the input
of the Form VAT 641…" implying that an assessment could be made by the officer
recording his decision to assess with all the necessary information on a piece
of paper; processing was a step coming after making the assessment. The Form 641
is therefore only evidence of the assessment not the assessment itself, which
could be made without the form being completed.
- The
question for the Tribunal is: does the absence of processing of the Form VAT 641,
with the consequence that the assessment does not appear on the ledger, mean that
there is no debt due to the Commissioners? Processing would normally have resulted
in a form 655 which was not required because of the notification by letter and
the form would therefore have needed to be intercepted. It may have been possible
to put the figure assessed on the ledger and then inhibit the enforcement, just
as happens when an assessment was under appeal, but the Commissioners decided
not do this. The ledger is the best evidence that the Commissioners think that
there is a debt. In all normal cases the result of making an assessment is that
it is recorded in the ledger. The absence of any figure in the ledger does suggest,
as Mr Cordara QC contends, that there is no debt. The issue for us is whether
the absence of the figure in the ledger is conclusive that there is no debt. Mr
Scott was asked, as a person within policy, what was the correct inference to
draw from the administrative procedure, and he replied that it was the intention
to create an immediate liability but to take no steps to enforce it. But we do
not think that the intention of the Commissioners should be conclusive. In favour
of there being a debt is that the Commissioners have done everything, except processing
the Form VAT 641, normally required for making an assessment and they have notified
the Appellant that they had made an assessment. The notification is the only document
seen by the Appellant and this made it clear that there was an assessment but
that the Commissioners would not enforce it. The Appellant can be in no doubt
that this is what the Commissioners intended. The absence of a figure in the Appellant’s
ledger does not mean that there is no debt; rather it is bad accounting in not
showing the debt in the place one would expect to find it. We do not think that
it is conclusive that there is no debt. An entry in a ledger does not create a
debt; it merely records the existence of a debt. Accordingly we find that the
documents did result in there being a debt due to the Commissioners.
- Does
it matter that the normal rules for making an assessment were not complied with?
Mr Cordara QC said that this was a case where the Tribunal has learned more than
any other Tribunal about the inside requirements of the whole process, and we
have certainly seen a lot of the Commissioners’ internal guidance. The normal
rules contained in Table 34 requiring the processing of the Form VAT 641 were
not complied with. Instead, Mr Excell sent an email stating that Primback protective
assessments were to be held on the file and not processed. Mr Gurd complied with
this guidance. Mr Cordara QC argues that this is contrary to the official guidance
contained in Table 34, and there is no evidence that Mr Excell was authorised
to change the guidance. The draft revised guidance in TA 2/99, attached to Mr
Excell’s email, which would have authorised not immediately processing the form
641 and was never issued, and therefore Mr Cordara QC contends that the email
was based on the false premise that the guidance would be altered. We consider
that his contentions pay too much regard to the official guidance in Table 34.
We accept that, as in the income tax cases, the tax authority’s practice is relevant
to the question when an assessment is made. We have no evidence about Mr Excell’s
ability, so far as the Commissioners are concerned, to vary Table 34 but the fact
is that his email gave guidance to do that. Mr Parker QC invited us to assume
that those giving advice to Mr Gurd had authority to do so, while Mr Cordara QC
said that this was not an occasion to do so since the advice was on the basis
that TA 2/99 would become effective. In our view we should accept that Mr Excell
had authority to act as he did. We do not therefore think it relevant that TA
2/99 was never issued. Mr Excell gave specific guidance to act in a certain way
in making Primback protective assessments. Mr Gurd acted on this guidance
from within the department and he has done what the department regarded as necessary
for the making of an assessment. In one case the Tribunal has relied on official
guidance in deciding where there was a valid assessment. In The Royal Bank
of Scotland Group plc v Customs and Excise Comrs (1999) VAT Decision No.16,418
the Tribunal decided that where a countersignature to the form VAT 641 is required
there is no assessment until that is obtained. Mr Parker QC pointed out that in
that case the assessment had not been notified either and he did not accept that
where a countersignature was required it was essential to a valid assessment.
Mr Cordara QC replied that the lack of notification did not affect the question
whether there had been an assessment. It is not necessary for us to decide whether
a countersignature, when required, is essential to the validity of an assessment.
Here Mr Gurd did comply with the specific guidance that he was given and we are
prepared to approach the case on the basis that the guidance he was given was
authorised by the Commissioners. Taxpayers have no access to such information
and the validity of assessments should not depend on matters internal to the department.
- Accordingly
we find that the documents, consisting of a fully completed Form VAT 641 in the
Appellant’s file and a letter notifying the Appellant that the Commissioners had
made assessments under section 73 but that the assessments would not be enforced,
do create a debt due to the Commissioners. Subject to our consideration of the
subsequent events we consider that this constitutes a valid assessment on the
basis that Mr Gurd complied with the instructions he was given, whether or not
those instructions were the normal method of making an assessment. The Appellant
was therefore fully informed about what the Commissioners have done. They know
nothing about the Commissioners’ internal procedures.
Do
subsequent events throw any light on whether the 16 December 1999 documents constituted
a valid assessment?
Contentions
of the parties
- Mr
Cordara QC also contends that if there was a valid assessment on 16 December 1999
it has been withdrawn by subsequent events, or those events demonstrate that it
was not a valid assessment.
- Mr
Cordara QC contends that the 25 May 2000 assessment (as reduced on 29 June 2000
and the additional sums assessed on 29 June 2000) is a cumulative assessment for
the Eight Periods which had already been assessed with the consequence that it
replaced the 16 December 2001 assessment. He says that if the 16 December 1999
documents are an assessment all that needed to be done was to process part of
the tax on the 16 December 1999 Form VAT 641, not make another assessment for
the same periods. The 6 July 2000 letter was not an assessment (for the same reasons
as the 16 December 1999 document). The 6 July 2001 and 23 March 2001 documents
were not assessments because of the absence of Forms VAT 641 or 643. The 19 December
2001 document was a valid assessment because the Form VAT 641 was processed but
by then it was out of time for most of the Eight Periods.
- Mr
Parker QC contends that 25 May 2000 assessment as reduced on 29 June 2000 and
the new assessment for additional amounts of 29 June 2000 are valid assessments
made on an alternative basis, namely that they apply regardless of the outcome
of Primback. In relation to the Eight Periods the subsequent document of
6 July 2000 is merely an arithmetic adjustment to the 16 December 1999 assessment
resulting from the other assessments, which figures are merely repeated in the
19 December 2001 document which was made in order to process the revised figures.
Reasons
for our decision
- The
25 May 2000 assessment was not intended to supersede the 16 December 1999 one.
The reason for it was quite different; it was to correct the figures regardless
of the outcome of the Primback case. We think it was correct for the Commissioners
to make a new assessment. The whole of the 16 December 1999 assessment would have
fallen if Primback had been decided in the taxpayer’s favour. The 25 May
2000 assessment needed to stand in this event. It was therefore an alternative
assessment, the effect of which was to reduce the amount that had been assessed
on 16 December 1999. The 6 July 2000 letter merely notifies a reduction in figures
caused by the other assessments. While one would expect there to be a form VAT
643 we do not consider that the lack of an internal document recording the reduction
affects its validity. The amount of the reduction was arithmetic and was notified
to the Appellants. We do not consider that this has any bearing on the validity
of the 16 December 1999 assessment.
- In
relation to the repeat of the figures for the Eight Periods in the 19 December
2001 document Mr Cordara QC contends that this is a new assessment made out of
time. He says it would be extraordinary for an officer to go through all the steps
for making an assessment without intending to do so. Mr Parker QC contends that
the VAT 641 was made in order to create a document for processing by the computer
in order to save processing all of the 16 December 1999 assessment as reduced
by the 25 May 2000 assessment (as amended on 29 June 2000 for the additional sums
assessed for six periods and as reduced for two of the periods). The resulting
Form 655 should have been intercepted and was sent out in error.
- Mr
Gurd wrote on 27 November 2001, the same date as he finalised the Form VAT 641,
asking for payment of the sums previously assessed. The letter begins:
"I
refer to the Notice of Assessment sent to you on 16 December 1999 and the amended
Notice of assessment sent to you on 6 July 2000 in the amount of £4,268,214; the
Notice of Assessment sent to you on 6 July 2000 in the amount of £449,045 and
the Notice of Assessment sent to you on 23 March 2001 in the amount of £709,137."
The
letter explains that Primback had been decided in the Commissioners’ favour
and continued: "We now request immediate payment of the VAT amounts previously
assessed…." The letter also states that the total amount assessed of £5,426,396
has been posted to the Appellant’s VAT account. The last paragraph, that the Appellant
could request reconsideration of the amount or appeal within 30 days, was not
in the specimen letter and seems to have been included from a different specimen
letter. It makes no sense in the context of the rest of the letter. Mr Gurd cannot
therefore have intended, and an observer of all the documents cannot have concluded
that he intended, on 27 November 2001, both to ask for payment of sums previously
assessed and to make a new assessment for the same total sum by completing and
processing the Form VAT 641. He intended, and it is objectively clear that what
he was doing was, to prepare a document for inputting on the computer that would
result in the debt being shown on the ledger. No doubt it is much simpler to have
one document processed than the previous four documents. The computer automatically
generated a form 655 of 19 December 2001 which Mr Gurd accepts he should have
intercepted, and which was later withdrawn. But the Appellant, having been asked
to pay the earlier listed assessments by Mr Gurd’s letter of 27 November 2001,
must have realised that the form VAT 655 sent to them on 16 December 2001 for
the same total figure was an error and was not a new assessment. Accordingly we
decide that, although Mr Gurd went through all the procedures for making and processing
an assessment culminating in the Form VAT 655 of 19 December 2001, in the light
of all the circumstances he did not make another assessment on that date. His
actions do not suggest that the 16 December 1999 document was not an assessment.
- Accordingly
we find (1) that there was a valid assessment made on 16 December 1999 and (2)
nothing that happened subsequently affected its validity except that the figures
were reduced as set out in the 6 July 2000 letter by reason of the subsequent
assessment made on an alternative basis. We understand that the application of
Primback to this case is still in dispute and accordingly our decision
is restricted to the validity of the assessment in principle. In case it is necessary
we give both parties liberty to apply.
- The
Commissioners are in principle entitled to their costs but Mr Parker had no instructions
whether this case was an exception to the normal rule that the Commissioners do
not ask for costs. If the Commissioners wish to ask for costs it is directed that
they should make a request for an award of costs to the Tribunal Centre within
21 days of the date of release of this Decision. If the Appellant wishes to make
any representations on costs this should be done within the same period.
