20676

VAT – default surcharge – reasonable excuse – appeal dismissed

MANCHESTER TRIBUNAL CENTRE

	THE PUBLIC RELATIONS COMPANY LTD	Appellant

-	and –

	HER MAJESTY’S COMMISSIONERS OF
	REVENUE AND CUSTOMS 	Respondents

Tribunal: Richard Barlow	 (Chairman)				

Sitting in public in Manchester on 7 March 2008

No appearance by the Appellant

Mr Richard Mansell of the Respondents’ solicitors’ office for the Respondents

© CROWN COPYRIGHT 2008

DECISION

1.	This is an appeal against a default surcharge in the sum of £432.56 imposed on the Appellant in respect of the period ending March 2007.

2.	The Appellant did not appear and at the end of the hearing I announced my decision which was that the appeal would be dismissed.  In accordance with rule 30(8) of the VAT Tribunal Rules 1986 I then issued a direction recording my decision and in accordance with rule 30(2), the Appellant having asked for a written decision, I now give this Decision containing my findings of fact and reasons.

3.	The Appellant’s VAT return for the period ending March 2007 was received one day late and no payment was received by the Commissioners until 8 May 2007.  The Appellant made that payment electronically and was therefore entitled to make it later than the 30 April which would be the usual due date but the extension allowed is only for seven days.  The payments therefore had to be made on or before 7 May 2007.

4.	In fact 7 May 2007 was a bank holiday which was why the payment was late.

5.	In a letter to the Commissioners dated 31 May 2007 the Appellant admitted that payment was not made on time “due to a human error”.

6.	That letter also said that the business is a small business and that a surcharge of £432.56 “is rather excessive for being one day late”.

7.	Later, in a letter dated 14 June 2007 the Appellant referred to the penalty being excessive as the error was unintentional and caused by human error.

8.	The grounds of appeal in this case state “unintentional late payment human error excessive penalty”.

9.	It is incumbent on the directors of any business to find out what is required as far as payment of tax is concerned and to comply with the rules.  More can be expected from a large company than a small one but the Commissioners make it plain to taxpayers when offering to allow up to seven days extension for electronic payments that the extension is for a maximum of seven days.  In addition the Appellant had defaulted on four previous periods in the immediately preceding six periods and could be expected to exercise extra care in making payments on time.

10.	The Appellant should reasonably be expected to have complied with the rules and has failed to show a reasonable excuse for the late payments as required by sections 59(7)(b) and 70(4) of the VAT Act 1994.  The tribunal has no power to mitigate the surcharge.

11.	Accordingly the appeal is dismissed.

MAN/06/8057

Richard Barlow
CHAIRMAN

Release date: 14 May 2008