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	United Kingdom VAT & Duties Tribunals Decisions
You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> Waterside (Wakefield) Ltd v Revenue & Customs [2008] UKVAT V20723 (27 June 2008) URL: http://www.bailii.org/uk/cases/UKVAT/2008/V20723.html Cite as: [2008] UKVAT V20723

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20723

PENALTY – builder believed no VAT due because zero rated – liability for white goods – business entertainment – missing purchase invoices – VAT of £27,947 due – no reasonable excuse - penalty reduced by 45% by Commissioners - appeal dismissed

MANCHESTER TRIBUNAL CENTRE

WATERSIDE (WAKEFIELD) LIMITED Appellant

- and -

THE COMMISSIONERS FOR

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: David S Porter (Chairman)

Sitting in public in Manchester on 6 June 2008

No one appeared for the Appellant

Mrs Kim Tilling from the solicitor's office, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2008
 


DECISION

1. In this case the Appellant appeals against an assessment of misdeclaration penalty reduced to £2,102 by a letter dated 17 October 2007 but did not attend the hearing. The Respondents say that there is no reasonable excuse under section 71 of the Value Added Tax Act 1994 ( the Act) but as there are grounds for applying a degree of mitigation under section 70 of the Act a reduction rate of 45% applies.
2. Mrs Kim Tilling from the solicitors' office appeared for the Respondents and produced a bundle of documents for the tribunal and as no one appeared for the Appellant the tribunal determined to proceed under rule 26(2) of the Value Added Tax Tribunal Rules 1986 (as amended)

The facts

3. The Appellant is a property company run by 3 Directors, one of whom has a separately registered property development business Azure Build Ltd. The Appellant had just completed the construction of a block of flats consisting of 87 units. No income had appeared on the VAT returns as Mrs Jayne Broadhead, their book keeper, did not think it was necessary because the building work was zero- rated. The construction had been funded by the Anglo Irish Bank with a loan of £11,750,000 which had been repaid.
4. From an inspection of the books, which had been meticulously maintained, it appeared that there was £44,142.55 of white goods supplied variously to the site and identified as blocked input tax. Business entertainment had been improperly claimed as an expense and there were some unpaid invoices. As a result a liability to VAT arose amounting to £27,947 with interest of £1146.91. A misdeclaration penalty arose in the sum of £3825 which was reduced as under to £2102:-

Period Amount Reduced (rounded)

04/04 £475 £261

10/06 £1681 £924

01/07 £472 £259

03/07 £1,197 £658

£3,825 £2102

The assessment of misdeclaration Penalty carries no implication of dishonesty

5. Mrs Tilling submitted that no reasonable excuse had been given for the misdeclaration and that as a reduction of 45% had been allowed the appeal should be dismissed.
6. Having considered the facts and no reasonable excuse having been given by the Appellant I dismiss the appeal but without costs. Subsequent to the hearing I noted from the office file a letter of 29 May 2008 from the Appellant to the tribunal which stated:-

"It is with regret that we inform you that Waterside (Wakefield) limited has found itself in financial difficulties and have made arrangements with Begbies – Traynor Insolvency Practitioners of Leeds to enter the company into Liquidation. As such we will not be at the tribunal on 6 June"

As the Liquidator had not been appointed, the Appellant is the correct to bring the appeal. If the Liquidator wishes to apply to the Tribunal to set aside this decision he must do so.

David S. Porter

CHAIRMAN


Release Date: 27 June 2008

MAN/07/1473