First-tier Tribunal (Tax)

[2011] UKFTT 27 (TC)

TC00904

Appeal number TC/2010/04212

VAT default surcharge – Following dismissal of Appellant company’s Finance Director VAT return and payment overlooked – whether reasonable excuse - no

FIRST-TIER TRIBUNAL

TAX

THE PHOENIX SAFE COMPANY LIMITED Appellant

- and -

THE COMMISSIONERS FOR HER MAJESTY’S

REVENUE AND CUSTOMS Respondents

TRIBUNAL: Mr Michael S Connell (Tribunal Judge)

Mr A W Holden (Member)

Sitting in public at Cunard Building  Liverpool on 29 September 2010

Having heard Mr A Evans, Finance Director of the Appellant Company, and

Mr L Fletcher, Officer of HMRC, on behalf of the Respondents :

© CROWN COPYRIGHT 2010

DECISION

1. This is an appeal against a VAT default surcharge for the period 09/2009 in the sum of £885.11 following late submission of the Appellant’s VAT return and payment of VAT due on 31.10.09.

2. The Appellant’s VAT payment was received by HMRC on 27.11.09 and the  return on 22.01.10.

3. Mr Evans, on behalf of the Appellant, explained that the company’s accountant/finance director who should have dealt with the VAT return and payment had been summarily dismissed on 23.10.09 following fraudulent activity against the company.  Mr Evans was appointed as his replacement on 09.11.09 and took what steps he could to correct matters and ensure that the company’s affairs were in order.  He had not been able to immediately attend to the issue of preparing and submitting the VAT return (the due date of 31.10.09 having in any event already passed) but eventually ‘submitted’ an on-line VAT return to HMRC and remitted the VAT due towards the end of November 2009.  It transpired that Mr Evans had not completed the final submission phase of final filing and only became aware of this when submitting the December return, when he re-entered the September return figures with the consequence that the return was filed on 22.01.10.

4. The issue before the Tribunal was whether the Appellant had a reasonable excuse pursuant to Section 59(7) VATA 1994.  Mr Evans explained on behalf of the Appellant company that no-one else in the company had the necessary accounting knowledge to file the VAT return and he himself and not used the on-line facility previously.

5. The Tribunal considered the Appellant’s submission but agreed with HMRC that the directors of the company had overall responsibility for ensuring that VAT returns and VAT payments due are filed and paid on time, as necessary.  Immediately the accountant/finance director was summarily dismissed on 23.10.09, the company directors should have taken appropriate action either by contacting the VAT helpline or enlisting professional assistance.

6. For the above reasons the Tribunal did not accept that the Appellant had a reasonable excuse for the default and accordingly dismissed the appeal and upheld the surcharge.

7. This Decision contains full findings of fact and reasons for the decision.  A party wishing to appeal this decision must apply within 28 days of the date of release of this Decision.  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.

MICHAEL S CONNELL

TRIBUNAL JUDGE

RELEASE DATE: 30 DECEMBER 2010