XDL Ltd v Customs & Excise [2003] UKVAT V18314 (12 September 2003)

VAT – Security requirement – Appeal heard in absence of Appellant – Certificate of tax unpaid by prior company – Decision not unreasonable – Appeal dismissed

LONDON TRIBUNAL CENTRE

	XDL LTD	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

				Tribunal:	THEODORE WALLACE  (Chairman)

Sitting in public in London on 5 September 2003

Jonathan Holl, senior officer advocate, for the Commissioners

The Appellant did not appear and was not represented

© CROWN COPYRIGHT 2003

DECISION

	This was an appeal against a requirement for security under Schedule 11, paragraph 4(2) of the VAT Act 1994 of £8,155 with monthly returns.  This requirement was in a letter dated 11 March 2002 and involved a reduction from an earlier requirement on 21 February; the reduced amount was based on reduced turnover notified by the Appellant and on monthly returns.

	The Appellant did not attend and the matter was considered in his absence under Rule 26(2).

	The director and secretary of the Appellant were the same as for Xicon Data Ltd which has now been liquidated.  The requirement was made because of a debt to the Commissioners by Xicon Data which has since been written off.  Mr Holl produced a certificate under Schedule 11, paragraph 14(1)(d) showing the debt at 21 February 2002 as £31,917.38.

	Mr Mitchell Knox, director of the Appellant, wrote on 8 April 2002 with his notice of appeal stating that Xicon Data did not owe VAT and had been up to date with its tax.  If this was correct, then the requirement would not have been reasonable.  However no material was submitted to support that contention and the certificate produced by Mr Holl which was dated 5 August 2002, four months after Mr Mitchell’s letter, conflicted with it.

	No list of documents was served by the Appellant.  It is for the Appellant to establish that the requirement was based on incorrect facts or was otherwise unreasonable.  This it has failed to do.

	Schedule 11, paragraph 14(1) provides in terms that a certificate that tax has not been paid is sufficient evidence of that fact until the contrary has been proved.  The contrary has not been proved.

	On the basis of the facts in the certificate, given the identity of officers of the two companies there was nothing inherently unreasonable in the requirement.  The appeal is therefore dismissed.

	In fact the Appellant has since de-registered for VAT.  Mr Holl told me that the Commissioners did not wish to withdraw the security requirement in case the Appellant notwithstanding registration made taxable supplies using the VAT number.  The requirement only applies to a taxable person.  Section 72(11) would seem to apply if the Appellant made supplies when over the registration threshold without providing security.  There is no reason to believe that the Appellant intends to do this; however it is the reason why the security notice remains in being.

	If the Appellant seeks re-registration, it would seem that the proper course for the Commissioners would be to make a fresh requirement if appropriate.

	The Appellant is entitled under Rule 26(3) to apply within 14 days to have the decision set aside.  This would involve a further hearing.  On any such application the Appellant should serve a List of the documents on which it intends to rely.

THEODORE WALLACE
CHAIRMAN

RELEASED:

LON/2002/598