First-tier Tribunal (Tax)

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You are here: BAILII >> Databases >> First-tier Tribunal (Tax) >> Layton v Her Majesty's Revenue & Customs [2009] UKFTT 36 (TC) (30 March 2009)
URL: http://www.bailii.org/uk/cases/UKFTT/TC/2009/TC00014.html
Cite as: [2009] UKFTT 00014 (TC), [2009] UKFTT 36 (TC)

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Layton v Her Majesty's Revenue & Customs [2009] UKFTT 36 (TC) (30 March 2009)
VAT - PENALTIES
Default surcharge

TC00014

Default surcharge –BACS payment 1 day late – withdrawal from bank account on time – appeal allowed

LONDON TRIBUNAL CENTRE

GEOFFREY DEAN LAYTON Appellant

- and -

THE COMMISSIONERS FOR

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Elsie Gilliland (Chairman)

Caroline de Albuquerque (Member)

Sitting in public in London on 28 January 2009

Gloria Orimoloye, Counsel, instructed by the General Counsel and Solicitor to Her Majesty's Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2009
 


DECISION

1. The appeal heard by the tribunal was that of Geoffrey Dean Layton (the Appellant) against a surcharge assessment dated 16 May 2008 for the accounting period 03/08 in the sum of £379.32.This was a reasonable excuse appeal as defined by rule 2 of the Value Added Tax Tribunals Rules 1986.
2. There was no attendance by or for the Appellant and the tribunal determined to hear the appeal under rule 26(2) of the said rules.
3. Counsel for the Respondents informed the tribunal that the due date for the period 03/08 was 30 April 2008. The return was received on 29 April 2008 without payment. The VAT amount payable was £2528.80. From copy documents supplied by the Appellant and in the bundle before us namely two bank sheets and a letter from the bank it appears that steps were taken by him on 2 May 2008 to pay the VAT due through his bank Abbey. Electronic payment allows a further 7 calendar days so that the due date for payment would become 7 May 2008. Payment was in fact received by the Respondents on 8 May 2008.
4. We have checked the two copy bank sheets for the Appellant's Business Reserve account with Abbey for the period 1 May 2008 to 1 June 2008. A withdrawal is shown against the date 'Fri 2nd May' of £2528.00 and the description is 'Hmce Vat 781311642'. For the whole of the period the account is in credit. The copy letter addressed to the Appellant is from Abbey Business Banking at Glasgow and is dated 15 July 2008. In it the bank confirmed to the Appellant that '...on 2 May 2008 at 17.20 hours you called us and requested a BACS payment to be sent to HMCE VAT, reference 781311642, for £2528.00'. It continued: 'This type of transaction normally takes 3-5 working days to reach the beneficiary account'.
5. The issues in this matter as made clear by counsel are first that the Appellant gave the instructions to the bank late in the afternoon of Friday 2 May at a time outside normal banking hours and secondly that the next working day was Tuesday 6 May as Monday 5 May was a bank holiday.
6. There is nothing in the letter from the bank to indicate what information was given to the Appellant as to when the money would be likely to reach the Respondents' account. A normal transaction time of 3-5 working days is referred to, but there is nothing to confirm that the bank warned the Appellant that although the VAT payment would be recorded as drawn from his account on Friday 2 May that day would not be included in the inter-bank transfer process. The Appellant's account was in credit and the option of making a CHAPS payment was available to him.
7. The Appellant has not attended to give evidence and clarify the position. However we are not satisfied that the bank procedures were sufficiently explained to him on 2 May and that his understanding of his position was clear. Accordingly we accept that the Appellant had a reasonable excuse.
8. The appeal is allowed.
9. There is no direction on costs.

LON//08/1969

ELSIE GILLILAND

CHAIRMAN
Release Date:30 March 2009