20309
DEFAULT SURCHARGE — appeal against in excess of six years surcharges arising from caring for handicapped sister — three periods of defaults allowed by Commissioners — appellant adequate time to arrange for assistance in completing VAT returns — no reasonable excuse — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

MAUREEN OLGA MADELEY	Appellant

- and -

THE COMMISSIONERS FOR
HER MAJESTY’S REVENUE AND CUSTOMS	Respondents

Tribunal: David Porter LLB

Sitting in public in Manchester on 20th June 2007

The Appellant appeared in person

Ms Kim Tilling, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents 

© CROWN COPYRIGHT 2007

DECISION

1.	Mureen Olga Madeley (the Appellant) appeals against default surcharges for the following periods and amounts;
17.1.00		£597.86		13.6.03	£2511.44
15.8.00		£822.30		16.1.04	£2200.38
23.2.01		£632.40		12.3.04	£2578.81
20.4.01		£1490.44		20.7.04	£2243.19
15.7.02		£2303.14		21.09.05	£2555.53
13.12.02		£2593.05		21.09.05	£1995.08
2.  	She submitted that as she was the sole carer for her mentally handicapped sister she found it vary difficult to complete her returns on time and she considered that she had a reasonable excuse.  The Commissioners, having allowed her three periods by way of reasonable excuse, considered that she had adequate time to make appropriate arrangements for the completion of her VAT return, and to pay the VAT arising, consequently she no longer had a reasonable excuse.
The Facts
3.   The Appellant explained that she was responsible for the full time care of her mentally handicapped sister.  Her sister is 52 years old but has the mental age of a 5 year old.  The Appellant had originally owned a travel shop, which she had been able to run because her parents had been able to look after her sister.  When her Mother died her Father, with her assistance, continued to provide care for her sister.  The problems arose on the death of her Father.  She had to sell the Travel Shop and decided to become the proprietor of a Public House.  Her sister was able to assist in the Public House, gathering up empty glasses and talking to the customers so far as she was able.  The arrangement worked quite well and from the turnover figures produced by Ms Tilling the business was turning over at least £200,000 up to 1999.  However, her sister’s health started to deteriorate and no firm diagnosis was forthcoming from the medical profession.  Her sister was, at that time, being treated for a perforated ear drum, which necessitated frequent visits to the doctor’s surgery. 
4.	In 2001 her sister was diagnosed with stomach cancer for which she was successfully treated.  The Appellant and her sister were required to attend at the hospital on a monthly basis and the Commissioners recognised that this must have been a very difficult time and agreed that she had a reasonable excuse for the periods 01/05, 04/05 and 07/05.  The accounts for the Public House also showed that the turn over had dropped to £82,000 during this period.
5.   	In 2003 her Christmas takings amounting to approximately £3,000 were stolen. She actually saw the thief taking the money and leaving the premises but was unable to stop him.  The police caught him but she did not recover her money.  The Appellant confirmed that some of her friends had helped out in the Public House and that she had advertised for, and employed casual staff.  She had found the latter to be unhelpful and in some cases dishonest.  This included the accountant who had assisted in setting up the books for the business.  In spite of the set backs she had decided to continue to run the Public House herself without the casual staff.  Fortunately her sister was much better but she still needed her undivided attention. 
6.   	The Appellant disclosed that she had had to borrow a substantial sum of money from a friend to pay off her VAT arrears.  She was not in a position to pay the amounts due under the surcharges and she was concerned that she may have declare herself bankrupt.  She felt that she was doing her best and that in the circumstances she had a reasonable excuse for not having paid the VAT due in the periods in question.
7.    Ms Tilling appreciated that the Appellant was having a very difficult time but confirmed that the Commissioners had allowed the three periods referred to by way of a reasonable excuse.  The business turnover had improved and although the VAT returns had been filed appropriately the VAT had not been paid on time.  The problems which beset the Appellant were long term and it was necessary for her to arrange her affairs so that she could pay the VAT when it was due.  Regrettably the Appellant did not have a reasonable excuse and the appeal should be dismissed.
The Decision
8.	I cannot have but the greatest sympathy for the Appellant in the light of her sister’s handicap.  She is clearly a caring and selfless individual, who has dedicated her life to look after her sister.  Unfortunately she cannot abrogate her responsibilities to the Commissioners on the bases of her domestic difficulties.  It may well be that the Public House is making very little money, but the Appellant considers that it represents the best way of looking after her sister and for the Appellant to make a living.  Given the turnover of the business she appears to be able to run the Public House with all that that entails.  She ought therefore to be able to arrange her affairs so that her VAT is paid on time.  She appears able to complete the returns on time. The Commissioners have made adequate allowances for the period when her sister was seriously ill with cancer but it is not possible to extend that excuse for the entirety of the period claimed.  The Appellant must either arrange for her sister to have a carer, or for an accountant or instruct some other appropriate person to help her with the financial affairs of the business.  I therefore find that the Appellant does not have a reasonable excuse for any of the periods and I dismiss the appeal. As the Commissioners have not asked for any costs no order is made as to costs.

DAVID S PORTER
CHAIRMAN
Release Date: 14 August 2007
MAN/07/360