First-tier Tribunal (Tax)

[2014] UKFTT 696 (TC)

TC03817

Appeal number: TC/2014/00327

VAT – EC sales list – penalty for late submission – whether reasonable excuse

FIRST-TIER TRIBUNAL

TAX CHAMBER

The Tribunal determined the appeal on 17.07.2014 without a hearing under the provisions of Rule 26 of the Tribunal Procedure (First-tier Tribunal)(Tax Chamber) Rules 2009 (default paper cases) having first read the Notice of Appeal dated 09.01.2014 (with enclosures) and HMRC’s Statement of Case submitted on 27.05.2014.

© CROWN COPYRIGHT 2014

DECISION

1.             The Tribunal decided that the penalty of £500 in respect of the late submission of EC Sales lists for the period 09.21 was properly imposed by the Respondents.

2.             The appeal is dismissed.

3.             The Tribunal found that the filing date for the 09.12 EC Sales list was 14 days after the end of the reporting period for paper Sales lists. The appellant submitted its list in paper form. The list was, therefore, due on 14.10.2012. It was received by the Respondents on 26.03.2013 i.e. over five months late.

4.             Section 66 of the VAT Act 1994 provides that the amount of a penalty to which a person who has been served with notice is liable is the greater of £50 and a penalty of the relevant amount for every day for which the default continues, up to a maximum of 100 days. The relevant amount in this case is £5. The penalty has properly been calculated by the Respondents as £500 on the basis of the default having continued for more than 100 days. It is noted that the Appellant had also submitted the 06.12. Sales list late and a Penalty Liability Notice had been issued in respect of that default.

5.             The Tribunal further found that there was no reasonable excuse for the late filing of the Sales list.

6.             It is the responsibility of the Appellant to ensure that Sales lists are submitted within the statutory timeframe; any delay by an accountant is not a matter that removes the responsibility from the Appellant Company. The size of the Appellant Company is not a matter that can be taken into account.

7.             The test applied by the Tribunal in considering the matter of reasonable excuse is whether the exercise of reasonable foresight and of due diligence and a proper regard for the fact that the Sales list would become due on a particular date would not have avoided the default. The facts and chronology of events, set out in the Notice of Appeal and the Respondents’ Statement of Case, disclose that such foresight and diligence by the Appellant would have avoided the default.

8.             In so far as the Appellant may suggest that the imposition of the penalty is disproportionate, unjust or unfair, those arguments have already been disposed of by the Upper Tribunal in HMRC v Hok UKUT 363 (TCC) and HMRC v Total Technology (Engineering) Limited UKUT 418 (TCC). In the former it was made clear that the First-tier Tribunal has no jurisdiction to determine the fairness of a penalty imposed by statute. It is plain from a perusal of the latter that a penalty of the magnitude of that imposed in this case could not be described as disproportionate even if the Tribunal had jurisdiction to deal with the issue.

9.             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.

WDF COVERDALE

TRIBUNAL JUDGE

RELEASE DATE: 21 July 2014