20782

DEFAULT SURCHARGE – neither the Appellant nor a representative  appearing – return delayed in post – alleged postal strike – insufficient funds- payment late- appeal dismissed

MANCHESTER TRIBUNAL CENTRE

RGS INSULATIONS LTD     Appellant

	- and -

THE COMMISSIONERS FOR HER MAJESTY’S REVENUE AND CUSTOMS	Respondents

				Tribunal:	DAVID S PORTER	  (Chairman)

Sitting in public in Manchester on 1 August 2008

Mrs Kim Tilling  instructed by the acting solicitor for the Commissioners for H M Revenue and Customs for the Respondents

No one appearing for the Appellant

© CROWN COPYRIGHT 2008

DECISION

1.	RSG Insulations Ltd (the Appellant) appeals against a surcharge in the sum of £736.42 for the period to 30.09.07 arising from an assessment dated 12.10.07 The Appellant says that the return and cheque were posted on 28 September 2007 by 1st class mail and would have been received in time had there not been a postal strike. The Respondents say that although there were postal strikes around the time that the return was sent, they did not fall during that period. The Appellant does not therefore have a reasonable excuse.
2.	 Mrs Kim Tilling instructed by the acting solicitor for H M Revenue and Customs appeared for the Respondents and produced a bundle of documents for the Tribunal. As no one appeared for the Appellant, this Tribunal determined to proceed under rule 26(2) of the Value Added Tax Rules 1986 (as amended).
3.	I find the following facts. The Appellant completed the VAT form which appears in the bundle and was dated 28 September 2007. Debbie Poucher, who had signed the return wrote to the Respondents on 23 October as follows:-
“…… The VAT return along with full payment was posted 1st class on 28th September 2007, in good time for you to receive the return in one of your pre-paid envelopes.
Considering that there was a postal strike during this period - it is arguable that we are not the only company to have their return delayed and feel a penalty is unjust for matters beyond our control. We are unaware that there is anything in your regulations that suggests in a threat of a postal strike we are obliged to provide proof of posting…..”
The due date for the return and payment was the 30 September and payment of the VAT was received on 12 October. The Appellant produced a letter from its Bank dated 13 November in which their manager states that he honoured cheques above the Appellant’s overdraft limit in circumstances in which he was satisfied that there would be sufficient funds in the account to meet the liability as a result of a payment in of which he was aware. The Bank statement produced to the Respondents, and in the bundle, shows that the Appellant was £44,708.87 overdrawn on 28 September 2007 with an overdraft facility of £25,000. A substantial payment was received by the Appellant on 3 October for £65,447.50 putting the Appellant £35,264.23 in credit.
4.	Mrs Tilling produced to the tribunal the dates of the postal strikes referred to by the Appellant. These were:-
29 June 2007
12 and 13 June 2007
4 and 5 October 2007
8 and 9 October 2007
10 and 11 October 2007

There is no reason therefore why a letter posted on 28 September would be delayed by a strike. 
5.	Mrs Tilling submitted that it was unlikely that the letter was posted on 28 September in light of the fact that the strike did not occur until 4 October. It is more likely that the return and cheque were posted late and during the period of the strike. Further the Respondents did not believe that the Bank would have supported and overdraft of £81,530.18 which would have been required on 28 September to clear the VAT assessment. In the circumstances the Appellant does not have a reasonable excuse and the appeal should be dismissed.
6.	This case had been listed before me on an earlier occasion and the Appellant’s representative had attended at West Point, the old address for the tribunal, I adjourned the hearing as I wanted the representative to attend in order to explain the reasons for the default. The case was adjourned until to-day and it is unfortunate that no one attended for the Appellant. In view of the facts I find that the Appellant does not have a reasonable excuse and the appeal is dismissed.
7.	The Commissioners did not ask for any costs so none are awarded

D S PORTER
CHAIRMAN
Release Date: 22 August 2008

MAN/08/0004