First-tier Tribunal (Tax)

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         [2010] UKFTT 365 (TC)

                                                                                                TC00647

Appeal number:  LON/2005/1203

DEFAULT SURCHARGE – Reasonable excuse – Illness of managing partner – Appeal allowed in part

FIRST-TIER TRIBUNAL

TAX CHAMBER

                                        BENSON COUNTRY PINE                       Appellant

                                                                      - and -

                                 THE COMMISSIONERS FOR HER MAJESTY’S

                                                   REVENUE AND CUSTOMS               Respondents

                                    TRIBUNAL:  SIR STEPHEN OLIVER QC

                                                             MRS RUTH WATTS DAVIES MHCIMA, FCIPD

Sitting in public in London on 3 August 2010

The Appellant was unrepresented

Mrs Pauline Crinnion, for the Respondents

© CROWN COPYRIGHT 2010

DECISION NOTICE

1.         No one attended to represent the Appellant.  The hearing notice had been sent out to the Appellant’s address as notified in the Notice of Appeal.  The appeal had been set down for 3 August 2010 and the date of notification had been 11 May 2010.  During the days leading up to the present appeal, several attempts had been made both by HMRC and by the Tribunal to get in touch with the Appellant to ensure that a representative would attend.  We were satisfied that it was proper to go ahead and hear the appeal in all the circumstances.  Once particular circumstance that we took into account was the extreme age of this appeal.  

2.         We went through the facts and circumstances summarised in letters and in a paper headed “Overview” produced by Mr Stephen Pollard.  It appears that Mr Stephen Pollard was a business partner of Harriet Render in the Benson Country Pine business since at least October 2000.  We infer that Harriet Render was the managing partner.  She was registered for VAT purposes as the sole proprietor of the Benson Country Pine business. 

3.         The case for Benson Country Pine has been presented on the basis that the ill-health of Harriet Render, had, for various reasons, been so severe that she had been disabled from taking part in any form of compliance with the VAT obligations of Benson Country Pine.  We are satisfied, having examined the facts as set out in the letters and in the Overview that a reasonable excuse existed until and including the period 03/03.  We note in this connection that HMRC had, presumably on reasonable excuse grounds, cancelled the liability notifications issued in respect of the periods 09/02, 03/03 and 09/03.

4.         In our view there was no reasonable excuse from 06/03 (with the exception of the period 09/03 which, as noted, has been acknowledged by HMRC).  Stephen Pollard was a partner in the business since October 2000.  He had, according to his Overview, become aware of the non-compliance in about March 2003.  He had caused a bookkeeper to be engaged.  From 06/03 it should have been reasonably possible to arrange that returns and payments of VAT were with HMRC within the time limits. 

5.         It follows that the default surcharge schedule should be altered to record a SLN for the 06/03 period, a SLNE for the 12/03 period and there should be graduated surcharges from then on.  As regards all periods from 03/02 until and including 03/03, a reasonable excuse existed with the result that all surcharges (unless already cancelled) should be cancelled.  To that extent therefore we allow the appeal.

6.         This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009.   The application must be received by this Tribunal not later than 56 days after this decision is sent to that party.  The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.

SIR STEPHEN OLIVER QC

CHAMBER PRESIDENT

RELEASE DATE:  6 August 2010