20385

Default Surcharge – Electronic payment instructed too late: Appeal Dismissed.

EDINBURGH TRIBUNAL CENTRE

	DAVID BLAIKIE ARCHITECT (PARTNERSHIP)	Appellant

	- and -

	THE COMMISSIONERS FOR 
	HER MAJESTY’S REVENUE & CUSTOMS	       Respondents

			Tribunal:	 (Chairman):  Mrs G Pritchard, BL., MBA., WS

Sitting in Edinburgh on Tuesday 25 September 2007

for the Appellant		Mr David Blaikie

for the Respondents	Mr Russell Harrison

© CROWN COPYRIGHT 2007.

DECISION

This is an appeal against a Default Surcharge at 10% imposed in respect of delay in receipt of payment of VAT due for the quarter 05/06 having a due date of payment of 30/06/06 amounting to £452.51.

The Appellant appeared and represented himself.  He was entirely credible.  Mr R Harrison appeared for HMRC.

The Appellant told us that he used internet banking for the purpose of this transfer.  His accountant did his books and told him how much he was due each quarter and when to pay.  This quarter he had two problems; firstly to collect enough fees to pay the VAT; secondly he was to be on holiday at the time payment was due.  He thought he solved the problems as several accounts were to be paid, and he set up an electronic payment system which he understood gave him 7 extra days to pay.

The due date for payment of his VAT became 07/07/06, a Friday.  He therefore organised in advance on his internet banking website with the Clydesdale Bank for funds to be transferred on 06/07/06.  The VAT left his account but did not reach HMRC until 5 days later on 11/07/06.  He was surprised and disappointed at the delay.  He was also surprised and disappointed at the suggestion by HMRC that electronic payment in any way extended the credit period so far as his accounts were concerned.

Mr Harrison for HMRC accepted Mr Blaikie’s good intentions but maintained HMRC’s position that there is a long history here of lack of effort.  HMRC would have ignored the delay had this been a first occasion of lack of payment by the due date.

The Appellant accepted he had a history.  As a result of this particular default he had consulted his accountants again and they were looking at a different method of trading to suit his business better.

Decision
The appeal is refused.  No expenses are due to or by either party.

Reasons
The Appellant simply had not taken sufficient care to ensure proper payment on time on this occasion.  The system is exacting to observe.  He failed to observe it.

MRS G PRITCHARD, BL., MBA., WS

CHAIRMAN

RELEASE:  5 OCTOBER 2007

EDN/07/88