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First-tier Tribunal (Tax) |
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You are here: BAILII >> Databases >> First-tier Tribunal (Tax) >> A & R Robertson & Black, WS v Revenue & Customs [2013] UKFTT 457 (TC) (28 August 2013) URL: http://www.bailii.org/uk/cases/UKFTT/TC/2013/TC02848.html Cite as: [2013] UKFTT 457 (TC) |
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[2013] UKFTT 457 (TC)
TC02848
Appeal number: TC/2013/01211
Value Added Tax – Whether VAT returns for three periods were outstanding - yes. Whether VAT returns supplied on paper are in accordance with VAT Regulations - No; whether reasonable excuse – no; appeal dismissed
FIRST-TIER TRIBUNAL
TAX CHAMBER
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A & R ROBERTSON & BLACK , WS |
Appellant |
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- and - |
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THE COMMISSIONERS FOR HER MAJESTY’S |
Respondents |
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REVENUE & CUSTOMS |
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TRIBUNAL: |
PRESIDING MEMBER PETER R SHEPPARD FCIS, FCIB, CTA, ATII |
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SCOTT A RAE LLB,WS |
Sitting in public at George House, Edinburgh on 23 August 2013
The Appellant was unrepresented.
Mrs E McIntyre, Officer of HMRC, for the Respondents
© CROWN COPYRIGHT 2013
DECISION
Introduction
“Your application for permission to make a late appeal will be considered at the start of the hearing. If permission is granted, the Tribunal will proceed to hear your appeal.
You will be notified as soon as the hearing is arranged
If you do not attend the hearing, The Tribunal may decide the matter in your absence”.
7. On the morning of Thursday 22 August 2013 one of the Tribunal clerks telephoned the appellant and spoke to Mr John P Gray the senior partner. This was a courtesy call to check if everything was in order for the following day and who might be attending the Tribunal. The clerk was told by Mr Gray that he would be unable to attend and he requested a postponement. The clerk contacted HMRC to advise them of this application and they objected to this very late request. The clerk then referred the matter to the presiding member assigned to the case. The request was refused for the following reasons.
i) Mr Gray makes no argument that he was unaware of the date of the hearing. Assuming there were no postal delays he has known of the hearing since the end of April 2013 and had made no application for a postponement until the day before the hearing and then he only did so as a result of the telephone call from the Tribunal. On 27 June 2013 Mr Gray, for the appellant, wrote to HMRC saying “We had understood this matter was under appeal. We attach a copy of our letter of appeal dated 21 November 2012 and copy Notice of hearing dated 24 April 2013.” Thus showing that he was at that time aware of the date of the hearing.
ii) The presiding member and the member had both prepared for the hearing.
iii) Mrs E McIntyre of HMRC had prepared for the hearing and objected to the request.
iv) The Tribunal had booked the room which if the application was allowed would have been unavailable for use by other Tribunals because of the short notice.
v) Between October and December 2013 the Tribunal is already committed to a number of cases which are set down for hearing over weeks rather than days. If the hearing did not go ahead it would probably not be until January 2014 that the appellant’s case could be heard.
vi) If a party fails to attend a hearing Tribunal Rule 33 allows an appeal to proceed if the Tribunal-
(a) is satisfied that the party has been notified of the hearing and
reasonable steps have been taken to notify the party of the hearing.
(b) considers it is in the interests of justice to proceed with a hearing.
In respect of (a) this had clearly been done. In respect of (b) no formal application for a postponement was received. However the presiding member considered an e-mail from Mr Gray to the Tribunal Clerk dated 22 August 2013. The e-mail reads as follows:
"Dear Sarah
Thank you for speaking with me.
I feel very strongly about this matter but as you know there is a bank holiday on Monday next week.
Attendance at the Tribunal on Friday for a self-employed person is really very, very difficult and I don't think I will be able to attend.
I would like to attend and suggest any future hearing is on a Tuesday, Wednesday or Thursday of any week in the afternoon.
Thank you for your assistance.
John P. Gray"
vii) The presiding member did not consider anything John P Gray wrote amounted to a good reason for postponing the hearing at such short notice. It was not just a bank holiday weekend for Mr Gray it was also a bank holiday weekend for the Tribunal and Mrs McIntyre all of whom would have been just as inconvenienced by the date as Mr Gray. Mr Gray had had since April to notify the Tribunal that the date was unsuitable for him. If the Tribunal had not telephoned one wonders when he would have bothered to contact the Tribunal.
viii) Mr Gray says that he feels very strongly about this matter. Papers in the bundle of documents provided before the hearing reveal that Mr Gray objects to submitting VAT returns on-line. Because Mr Gray objects to submitting VAT returns on line he sends paper ones by amending old return forms. HMRC reject them. Thus the longer this matter continues the worse the position will get and the higher the penalties the appellant may potentially have to pay. Thus it was considered to be in the appellant’s interest that the appeal be heard as soon as possible.
8. In the above circumstances the presiding member decided that it was in the interests of justice to not postpone the hearing.
9. On the morning of Friday 23 August 2013, the day the hearing was scheduled to take place, the Tribunal was advised by email that Mr Gray was considering appealing against the decision not to postpone the hearing. By 3pm on the Friday afternoon the time allocated for the hearing to start no appeal had been received and Mr Gray had not attended the tribunal so the Tribunal proceeded to hear the appeal in his absence.
Statutory Framework
Regulation 25(1) contains provisions for the making of returns and requiring them to be made not later than the last day of the month following the end of the period to which it relates. It also permits HMRC to vary that period, which they do in certain circumstances eg by allowing a further seven days for those paying electronically.
Regulation 25A(3) requires the provision of returns using an electronic system.
Regulation 25A(6) lists exceptions to making returns by an electronic system.
Regulation 25A(15) states that for prescribed accounting periods ending on or after 31 March 2011, a person who fails to comply with paragraph (3) above is liable to a penalty.
Regulation 25A (16) covers the concept of a person having reasonable excuse for failing to comply with Regulation 25A(3).
Regulation 25A(17) sets out the level of the penalty which depends on the level of turnover. The penalty for those such as the appellant who have a turnover between £100,001 and £5,600,000 is £200.
The Appeal
That appeal letter states as follows:
“Dear Sirs
Registration for online returns
Your letter of 5 November refers.
VAT returns are still outstanding for VAT periods 09/11, 06/12 and 09/12. The online filing penalties for March 2011, June 2011 and December 2011 are upheld, the penalty for the March 2012 period having been upheld in my letter of 3 October 2012.
If you dispute this decision you have 30 days………….” etc.
The letter of 5 November referred to provides no further assistance.
On 23 January 2013 HMRC wrote to the appellant. The second sentence of the second paragraph on Page 2 of that letter states:
“under the circumstances, as you did receive incorrect advice I will arrange for the four penalty charges of £200 each, that have been made for the paper returns you submitted (for the periods 03/11, 03/12, 06/11 and 12/11) to be removed and they will no longer be payable”.
Thus the four penalties appealed against in the 21 November 2012 letter are no longer payable. This only leaves one thing outstanding that could be appealed against and that is the statement
“VAT returns are still outstanding for VAT periods 09/11, 06/12 and 09/12”.
13. The notice of appeal dated 7 February 2013 has not been completed properly.
Section 3 is headed “Details of the Decision(s) you are appealing” the second box asks Date of Decision(s) this has been left blank.
The next box says type of Tax. It has been answered “VAT penalty”.
In Section 7 Grounds of Appeal is written the following:
“No official VAT return forms were sent to us. We submitted our own VAT returns and related cheques by post. These have not been acknowledged. The VAT position is up to date and your surcharge should be removed”.
Facts
A return for the period 03/10 also labelled September 2010 dated 12 September 2012
A return for the period 03/10 also labelled 30.12.10 unsigned and undated
A return for the period 03/11 dated 24 August 2012
A return for the period 06/11 dated 28 August 2012
A return for the period 12/11 dated 15 August 2012
A return for the period 03/10 also labelled 30.3.12 dated 6 September 2012
The Tribunal notes that it appears that all of these returns were submitted much later than required by Regulation 25, ie the last day of the month following the end of the period to which they relate.
Respondent’s submissions
21. Mrs McIntyre took the Tribunal to The VAT Regulations 1995 Regulation 25A(3) which states:
“Subject to paragraph (6) below, a person who is registered for VAT must make a return required by Regulation 25 using an electronic return system whether or not such a person is registered in substitution for another person under regulation 6 (transfer of a going concern).”
Paragraph (6) of Regulation 25A states:
“A person
a) who the Commissioners are satisfied is a practising member of a religious society or order whose beliefs are incompatible with the use of electronic communications, or
b) to whom an insolvency procedure described in any of paragraphs (a) to (f) of Section 81(4B) of the Act is applied
is not required to make a return required by regulation 25 using an electronic return system.”
Decision
PETER R SHEPPARD