R J Clark & Sons Ltd v Customs & Excise [2003] UKVAT V18428 (01 December 2003)

Default surcharge – reasonable excuse – unsigned cheque sent by bookkeeper with return – genuine mistake – appeal refused.

EDINBURGH TRIBUNAL CENTRE

	R J CLARK & SONS LTD	     			Appellant     

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	       Respondents

			Tribunal:  T GORDON COUTTS, QC (Chairman)

Sitting in Edinburgh on Monday 1 December 2003.

for the Appellants		R J Clark

for the Respondents	Mr A McCue

© CROWN COPYRIGHT 2003.

DECISION

The Appellant Company were due to make payment on a substantial sum of VAT.   A return, which was due on 31 July 2003 was posted but did not arrive until 1 August 2003.    The Appellant Company was already within the default surcharge regime.     Unfortunately the cheque which was sent with the return was unsigned and on 5 August 2003 was dishonoured by the Appellant Company bank.    

	There was no question of insufficiency of funds but in the result payment was not made on the due date.    

	The Appellant who appeared was a Director.  He stressed that a genuine mistake had occurred but that mistake was one made by an employee upon whom reliance had plainly been placed by the Appellant.

	Such a situation is expressly precluded from amounting to a reasonable excuse by the Value Added Tax Act Section 71(1) and, although this is a case in which the Tribunal might have been persuaded to mitigate the surcharge had that been possible it is not as yet possible and the appeal must be refused.    This is yet another case which demonstrates the inflexibility of the Default Surcharge regime which recognises no shade of grey in the matter of default.

T GORDON COUTTS, QC

CHAIRMAN

RELEASE:   1 DECEMBER 2003.

EDN/03/95