20606

Value Added Tax  -  Default surcharge  -  Trader with numerous defaults, many out of time to appeal without leave  -   Confusion as to whether trader was on monthly or three-monthly returns  -  Appeal allowed in part

LONDON TRIBUNAL CENTRE

	SHARREN STIPPLE T/A INFINITE RECRUITING	           Appellant

-	and –

	THE COMMISSIONERS FOR HER MAJESTY’S REVENUE & CUSTOMS 	 Respondents

				Tribunal:	HOWARD M NOWLAN (Chairman)
						JOHN G ROBINSON

Sitting in public in London on 13 February 2008

The Appellant failed to appear and was not represented

Simon Chambers of HMRC’s Solicitor’s Office, for the Respondents

© CROWN COPYRIGHT 2008

DECISION

1.   This was a case where the Appellant had 17 defaults, the majority involving surcharges at the 15% rate. Correspondence indicated that she felt very aggrieved at her treatment by HMRC.

2.     Many of the defaults were out of time unless we gave leave to appeal out of time.    In her absence we indicated that we would consider the merits of her case, in so far as we could in her absence, before ruling whether appeals could be brought out of time in respect of some of the earlier defaults. 

3.    The only ground advanced as a reasonable excuse for the late payment of the Appellant's VAT was that when she had first been registered, there was some confusion with a letter from HMRC dated 14 March 2004 indicating that she would be on three monthly reporting, and another also from HMRC dated 18 March 2004 indicating that she would be on monthly reporting. To his very great credit Mr. Chambers informed us that he had unearthed a note of a telephone conversion that took place at the end of the same March in which yet again an HMRC officer would have confused the Appellant by referring again to the fact that she was on three monthly reporting.  

4.    The confusion cannot have subsisted for that long a period because the Appellant was required to make monthly returns, and unfortunately received Default Surcharge notification with great regularity. 

5.    Again to his credit, Mr. Chambers conceded that HMRC officers might have got the Appellant off "on the wrong foot", and he thus thought it appropriate to concede that the first six defaults should be eliminated. 

6.    Our decision is accordingly that the appeals could be heard out of time, and we decide that the first six defaults, down to the period covering December 2004 will be struck out.  It follows that this decision will also eliminate and reduce the amount of the surcharges in the defaults at the beginning of the year 2005 because at present those are all at the 15% rate. The result of this decision is that the first four defaults for the year 2005 will be at 0%, 2%, 5% and 10% instead of at the present 15% rate.      We dismiss the appeal in relation to all other periods since no further ground has been advanced in correspondence for any defaults other than the initial confusion caused by HMRC officials. 

7.    We should mention two additional points.  First, since the appeal was heard in the absence of the Appellant, the Appellant can apply to the Tribunal within 14 days of the release of this decision for a re-hearing at which she would appear. It is for the Tribunal to decide whether to grant that re-hearing. The other point that we make is that the grounds on which we can rule that defaults should be struck out on grounds of reasonable excuse are narrowly defined, and we consider that this decision has been heavily influenced by a generous, albeit possibly also appropriate, attitude taken by the representative of HMRC. We hope that the Appellant will appreciate this and take it into account in her overall judgment of the conduct of HMRC

HOWARD M NOWLAN
CHAIRMAN

RELEASED: 6 March 2008

LON 2007/0469