[2012] UKFTT 529 (TC)
TC02205
Appeal number: TC/2012/04999
VAT
penalties. Onus of proof. Evidence of breach
FIRST-TIER TRIBUNAL
TAX CHAMBER
MRS
PAULA THORNE Appellant
-
and -
THE
COMMISSIONERS FOR HER MAJESTY’S
Revenue
& CUSTOMS Respondents
TRIBUNAL:
JUDGE GERAINT JONES Q. C.
SIMON BIRD ESQ
Sitting in public at Eastgate
House, Cardiff on 13 August 2012.
No appearance by the Appellant
Mr Mayo, instructed by the
General Counsel and Solicitor to HM Revenue and Customs, for the Respondents
© CROWN COPYRIGHT
2012
DECISION
1. The
appellant, Mrs Thorne, took over the business known as The Turberville Hotel,
Llanharan with effect from 1 November 2010. She was obliged by Schedule 1,
Value Added Tax Act 1994 to register herself for VAT purposes within 30 days
thereof.
2. On
20 May 2011 the respondent wrote to the appellant to inform her that it
proposed to charge a penalty for late registration, which, by its later letter
of 30 August 2011, it quantified at £2140. That sum was later reduced to £631.
We are not sure why the figures were so discrepant.
3. The
appellant responded, by her letter dated 9 November 2011, to say that she had
sent the necessary registration forms to the respondent, timeously, in November
2010. It was after that that the penalty amount was reduced to £631.
4. The
appellant pointed out in her response to the respondent, which appears in
manuscript on the face of form NPPS1, that she had sent the necessary
registration documents to the respondent in good time and then asked the
respondent to say on what date it contended that it had received the documents.
Instead of receiving the courtesy of a proper reply to that query, the appellant
then received an "Amended Notice of Penalty Assessment" dated 9
December 2011 in the sum of £631.
5. The
appellant's response, by her letter of 4 January 2012, was that she had sent
the necessary registration forms to the respondent, by post, on 26 November
2010. The respondent treated this letter as a request for a review. By the
respondent’s letter of 13 March 2012 it upheld the penalty after undertaking a
review that completely failed to address the real issue, that is, that the
appellant had in fact submitted her registration forms timeously. Instead, the
review concentrated on the amount of the penalty.
6. The
appellant has appealed to the Tribunal. She did not attend the hearing but
relied upon her written material.
7. As
this is a penalty case, the burden of proving the alleged default, which is
denied by the appellant, lies upon the respondent. Further, as this is a
penalty case, by reference to the decision of the European Court in Jusilla
v Finland [2009] STC, the appellant is entitled to have the case against proved,
if it can be proved, in a manner compliant with and respecting Article 6 ECHR.
8. The
respondent has adduced no witness evidence to show anything about how it deals
with incoming mail. It has simply produced the front page of the registration
form which shows that somebody put a "Post Proceed" stamp upon it
showing the date 8 March 2011.
9. There
are three possibilities. They are:
(1)
That the appellant did not post her registration form on 26 November
2010, but in fact posted it in early March 2011. In short, that she has lied
about when she posted them.
(2)
That delivery of the posted form was delayed by the Royal Mail.
(3)
That the form was posted as the appellant says and delivered in due
course of post, but not properly logged and dealt with once it arrived at the
respondent’s premises.
10. It is not for us
to speculate as to which of the three above possibilities, is correct. It
suffices for us to say that the respondent has come nowhere near to proving
that possibility (1) is applicable. The respondent has adduced insufficient
evidence to justify any such finding. The registration form is dated 24
November 2010, only two days before the appellant says that she put it into the
post. There was no purpose to be served by her delaying its submission to the respondent.
11. If possibility
(2) represents the true factual situation then the appellant's honest belief
that she had sent the registration forms to the respondent would undoubtedly
amount to a "reasonable excuse" until such time as she became aware
of the fact that the registration forms had not in fact been delivered to the
respondent.
12. It thus follows
that this appeal must be allowed. No penalty is due.
13. 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.
Decision.
Appeal allowed. No penalty is due.
GERAINT JONES
Q.C.
TRIBUNAL JUDGE
RELEASE DATE: 21 August 2012
