20338

Value Added Tax  -  Penalty of £500 for late submission of an EC Sales list  -  Claim that the relevant form had been sent on time and must have been lost in the post  -  Appeal dismissed

LONDON TRIBUNAL CENTRE

	ACROL UK LIMITED	           Appellant

-	and –

	THE COMMISSIONERS FOR HER MAJESTY’S REVENUE & CUSTOMS 	 Respondents

				Tribunal:	HOWARD M. NOWLAN (Chairman)
						SHEILA EDMONDSON F.C.A.

Sitting in public in London on 5 September 2007

The Appellant was not represented or present at the hearing
Simon Chambers of HMRC’s Solicitors’ Office on behalf of the Respondents

© CROWN COPYRIGHT 2007

DECISION

1.     This was an appeal against a penalty of £500 imposed on the Appellant company for its alleged failure to file its EC Sales List for the period “063”, that being for the third quarter of the year 2006.

2.      EC Sales Lists are forms that have to be completed by businesses that export goods to the other members of the European Union.    The Lists are doubtless used as part of the machinery for checking, across the community, that the correct VAT is being paid in the different countries, and that exports from countries within the community to other member states are matched by corresponding imports.   Failure to complete and submit the forms is in no way geared to the responsible business actually paying its own liability for VAT.   Accordingly non-compliance is simply met with liability for £5 daily fines, with a maximum of 100 daily fines for one offence  and £10 daily fines for second and further offences. 

3.      The Appellant was not present or represented in any way at the hearing.       Its case for disputing the fine was based on the contention that its form for the period 063 had indeed been filed on time, and that it must have been lost in the post.        It was suggested that this was proved by the fact that there had been telephone discussions about the content of the form in the period between the date when the Appellant claimed that the form had been submitted, and the date when HMRC accepted that they had received a copy of the form.     In this context the due date for the filing of the particular form was 11 November 2007 and HMRC accept that they received the form, or a copy of the form on 3 April 2007.

4.     Additional relevant facts and contentions were as follows.    Whilst forms submitted by the Appellant had not been dated, the representative of HMRC pointed out to us that the contentious form had indeed been dated 15 October 2006, in other words well before the date by which it was due to be filed.       It was also contended in a letter written by the Appellant to HMRC that their filing record had generally been good, and that because the Sales Form did not result in any payment of VAT and consequent debit to their bank account, there was no way of knowing whether a form that they had posted had indeed been received. 

5.     In the absence of the Appellant we were naturally hampered in dealing with this Appeal because the Appellant was unable to respond to the following information provided by HMRC.

6.     We were shown an internal HMRC document that purportedly recorded all contact (telephone calls and letters and filing of forms) between the Appellant and HMRC in relation to EC Sales Lists.   This form recorded the entries made by four different HMRC officers (whose initials appeared against the various entries) and while the Respondents could not definitely establish that there had not been other phone calls which had not been properly recorded on the form, we had no reason to suppose that there had been other contacts between the Appellant and HMRC. 

7.     The form did record a telephone call on 12 October 2006 when it was recorded that the caller said that “The Trader’s accountant will not be in the office until Wednesday 18 October, whereupon he would then complete the ESL asap”.     A subsequent record indicated that the ESL was received on 23 October, and that although it was received late, no penalty was imposed.  The significant feature about these two entries is that they did not relate to the ESL presently in contention.   They related to the ESL for the previous period, namely for the second quarter of 2006; not the third.    There were no other records of telephone calls. 

8.      It accordingly seemed to us that it was extremely likely that the telephone call that the Appellant’s director or representative referred to in correspondence had been the one recorded in the HMRC Compliance Action Sheet which referred to the previous ESL, and so in no way confirmed that the later 063 ESL “must have been received because we received telephone questions about it.”

9.     It was also pointed out, on behalf of HMRC, that contrary to the claim by the Appellant, the Appellant had regularly been late in filing EC Sales Lists.  This does not of course prove that the form for 063 had not been posted and lost in the post, but it does undermine the Appellant’s claim that its filing record had been good. 

10.     The point that we find most damaging to the Appellant is that it does seem to us to be most improbable that the form for the period 063 was filed on or shortly after it was dated (namely on or around 15 October 2006), because at this date there were still discussions relating to the late filing of the List and form for the previous quarter period; and the form for 063 was not even due to be filed until 11 November.      In the absence of any representative of the Appellant we felt compelled to conclude that the telephone discussions had referred to the earlier form, and that there was no evidence that the form for the later period was filed until late March 2007, and received on 3 April.    Accordingly the Appellant’s appeal is dismissed, and the penalty stands. 

HOWARD M. NOWLAN
CHAIRMAN

RELEASED: 12 September 2007

LON/2007/0875