19325

ASSESSMENT – based on diary showing true taking for a six month period with resulting suppression rate applied to a longer period – appeal dismissed

LONDON TRIBUNAL CENTRE

	FAMILY PET SHOP LIMITED	Appellant

	- and -

	THE COMMISSIONERS FOR HER MAJESTY’S
	REVENUE AND CUSTOMS	Respondents

			Tribunal:	DR JOHN F AVERY JONES CBE (Chairman)
					SUNIL DAS 

Sitting in public in London on 28 October 2005

The Appellant was not represented

Pauline Crinnion, Officer of HM Revenue and Customs, for the Respondents

© CROWN COPYRIGHT 2005

DECISION

1.	This is an appeal by Family Pet Shop Limited against an assessment dated 16 November 2004 for periods 06/02 to 06/04, the amount of which has been adjusted to £34,454 because transposition errors had been found, and a further assessment for £2,585 for period 03/03 because the original assessment could not be increased for this period.  
2.	When the appeal was called on the Appellant was not represented.  Mrs Crinnion told us that she had spoken to the Appellant’s representative, Mr K.K. Shah FCA of RBS Accountants Limited, chartered accountants and registered auditors of South Quay, Docklands, London E14, on 17 October 2005 who told her that he had tried to contact the Appellant but had failed to do so and had no instructions.  She rang him again on 21 and 25 October leaving message on both occasions and his secretary rang back on the second to say that he would not be attending as he had no instructions.  She tried to contact the Appellant on the telephone number given on the notice of appeal but was told that it was now a computer firm.  
3.	RBS Accountants Limited had written to the Tribunal on 14 June asking for a hearing in October and saying “we will represent our above client at the hearing.”  No subsequent communication was received from them, which we regard as discourteous.  We would remind them that as the representatives on the record who submitted the notice of appeal they owe a duty to keep the tribunal informed or take themselves off the record.  As it is, because they did not inform the Tribunal of the position the Chairman and Member of the Tribunal were booked for a day, therefore depriving other taxpayers of the opportunity of having their appeal heard, and Mrs Crinnion attended on behalf of Customs with two officers, resulting in a considerable waste of public money.  If the Tribunal had known in good time that RBS Limited were no longer instructed, further steps could have been made by Customs to contact the Appellant and if it was clear that nobody would attend, the hearing could have been cancelled and the appeal brought on before a Chairman alone without any witnesses from Customs during an applications day.  If we had power to make a wasted costs order against RBS Accountants Limited we would have done so.
4.	Mrs Crinnion initially asked us to dismiss the appeal for want of prosecution under rule 18(2) of the VAT Tribunals Rules 1986 but we were not satisfied that there had been any inordinate and inexcusable delay.  We proceeded to hear the appeal under rule 26(2).
5.	We find from the papers that that the assessment was based on entries in the Appellant’s diary produced to officers making an unannounced visit with the police and the RSPCA.  This recorded daily takings.  Sales in the diary for the period 1 January to 30 June 2004 were £176,625.64 whereas declared in the VAT returns were £86,460, showing a suppression rate of 104.28%.  The assessment was made by applying this suppression rate to the declared sales for the period 06/02 to 06/04.  A misdeclaration penalty was also imposed but this was not appealed.  The grounds appeal are that the figures do not agree with the records, appear to be estimated and accordingly the assessment was not made to best judgment.  We are satisfied with Customs’ method, which is based on the diary containing what appear to be the true takings for a 6 months period rather than, as often happens, a few days invigilation.  The burden of proof is on the Appellant to disprove the assessment, which the Appellant has not discharged.  We see no merit in the points raised in the grounds of appeal.
6.	Accordingly we dismiss the appeal.

JOHN F AVERY JONES

CHAIRMAN
RELEASE DATE: 4 NOVEMBER 2005

LON/04/2356