First-tier Tribunal (Tax)

[2009] UKFTT 272 (TC)

TC00218

Appeal number:  EDN/08/190

Default Surcharge – late instruction of BACS payment – reliance on third party not reasonable excuse Section 71 VATA 1994 – Appeal Refused.

FIRST-TIER TRIBUNAL

TAX

DAVID LOW – T/A LOWS TRADITIONAL FISH & CHIPS                                             Appellant

                                                         - and -

                              THE COMMISSIONERS FOR HER MAJESTY’S

                                      REVENUE AND CUSTOMS (VAT)      Respondents

                                        TRIBUNAL JUDGE: Mrs G Pritchard, BL., MBA., WS

Sitting in public in Edinburgh on Thursday 8 October 2009

Heard on papers for the Appellant

Mr Russell Harrison instructed by the General Counsel and Solicitor to HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2009

DECISION

1.     This is an appeal against a default surcharge applied in respect of the quarter 06/08 in the sum of £792.32

2.     Mr Low could not attend and asked for the Tribunal to consider this matter based on his written submissions which was agreed.  Mr Russell Harrison represented HMRC.  From the evidence we found the following facts:

1.       The Appellant trades as Lows Traditional Fish & Chips in Aberdeen.

2.       He has an established record in Value Added Tax (VAT) matters of making staged payments of his VAT in two tranches, one of £10,000 and the other for the balance.

3.       Until 2006 these were generally timeous.  However since 2006 there has been some slippage and Mr Low entered the surcharge liability period for the quarter 07/06, in respect of late payment.

4.       His first actual penalty imposition occurred in the quarter 07/07 one year later, and second also 12/07 when in both bases the financial penalty of 2% was below the minimum imposition and was not collected.

5.       However for the quarter 06/08 both tranches were instructed late by BACS payment on 06/08/08, and 08/08/08 so that VAT was not received by the due date of 07/08/08 which is the extended due date in respect of BACS payments.

6.       Mr Low advised he had a new book keeper who was not aware of the requirements.

Decision

3.     The appeal is refused.

Reasons for Decision

4.     Mr Low knew he was in a penalty regime.  In his letter he accepts the lateness of the instruction.  His reason that a person whom he relied on to do his bookkeeping did not know of the necessity of being timeous with the payments is excluded as a reason for allowing the appeal by S71 of the Value Added Tax Act 1994.  It is not therefore available as a reasonable excuse.

Expenses

5.     No expenses are found due to or by either party.

MRS G PRITCHARD, BL., MBA., WS

TRIBUNAL JUDGE

RELEASE DATE:  16 OCTOBER 2009