20172
VAT — PENALTIES — default surcharge — doctors’ letters requested by HMRC not provided by the Appellant — Appellant failing to demonstrate reasonable excuse for lateness of VAT return and non-payment of tax by reason of illness — tribunal without evidence — appeal dismissed  

MANCHESTER TRIBUNAL CENTRE

 
 	SANJUNE LTD
				trading as THE BLACKSMITHS ARMS	Appellant

- and -

THE COMMISSIONERS FOR
				HER MAJESTY’S REVENUE AND CUSTOMS	Respondents

Tribunal: Michael Johnson

Sitting in York on 4 May 2007

There was no attendance on behalf of the Appellant
 
Bernard Haley, of the Solicitor's office of HM Revenue and Customs for the Respondents 

© CROWN COPYRIGHT 2007

DECISION

1.	This is an appeal against a default surcharge for £1,251.06 imposed in respect of the Appellant’s VAT period 07/06.

2.	No-one attended to represent the Appellant at the tribunal hearing.  After waiting half an hour, and conscious that there was no explanation for the non-representation despite the Appellant having been informed of the hearing, I decided to proceed to hear the case.  I am empowered to do that under rule 26(2) of the Value Added Tax Tribunals Rules 1986 (as amended). 

3.	The grounds of appeal contained in the notice of appeal state that Mrs Sandra Humble, director of the Appellant, was forced to undergo breast surgery.  Additionally, the Appellant’s accountant suffered a heart attack.  The Appellant offered to provide doctors’ letters covering both these undeniably traumatic events.  

4.	The clear inference from the grounds of appeal is that these events provide a reasonable excuse for the Appellant not having despatched its VAT return in time and for having made late payment of the tax due.  The due date in this instance was 31 August 2006.  Mrs Humble signed and dated the Appellant’s VAT return on 8 November 2006 and she ticked the box to indicate that the tax was enclosed with the return. Bernard Haley, representing H M Revenue and Customs (“Customs”), informed the tribunal that the return and the tax were received by Customs on 10 November 2006.

5.	On 5 April 2007, Customs wrote to the Appellant requesting copies of the doctors’ letters referred to in the notice of appeal.  The letter contained an obvious “carrot” by way of inducement to the Appellant to send the copies.  The letter stated:

“It may be that these [doctors’ letters will] allow us to show discretionary waiver of surcharge and thus prevent the need to go to tribunal”.

6.	Unfortunately, despite a reminder letter to the Appellant dated 19 April 2007, it appears that Customs have not heard from the Appellant.  The letter dated 19 April 2007 reminded the Appellant that the tribunal hearing would take place on 4 May 2007, and it indicated that the hearing would have to take place if the requested information was not supplied.

7.	For Customs, Mr Haley submitted that the absence of any reply from the Appellant told its own story, such that Customs were justified in being sceptical about any reasonable excuse that might be inferred from the contents of the notice of appeal.  If the appeal was justified, why not provide copies of the doctors’ letters?  And why not take up the offer of a discretionary waiver of the surcharge if this was open? 

8.	I agree that the situation is strange and illogical.  I am forced to conclude that the Appellant, having issued its appeal, has since lost interest in pursuing it.  The Appellant has not answered letters, nor has it provided the information reasonably sought, nor has it sent a representative to tribunal to further its case.

9.	In these circumstances, all the tribunal is able to do is to dismiss the appeal as not having been made out.  Accordingly I indicated at the conclusion of the hearing that, whilst having sympathy with Mrs Humble, I had decided that in this instance the default surcharge must stand.   This document records my reasons for so deciding.

MICHAEL JOHNSON
CHAIRMAN
Release Date: 22 May 2007
MAN/2007/0137