United Kingdom VAT & Duties Tribunals Decisions

Teamwork Technical Services Ltd v Customs & Excise [2003] UKVAT V18344 (20 October 2003)

LONDON TRIBUNAL CENTRE

TEAMWORK TECHNICAL SERVICES LTD Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: THEODORE WALLACE (Chairman)

MRS E M MCLEOD, JP, CIPM

Sitting in public in London on 11 June 2003

Ian Long, managing director, for the Appellant;

Jonathan Holl, senior officer advocate, for the Respondents

© CROWN COPYRIGHT 2003


 


DECISION

This was an appeal against a default surcharge of £1,115.84 following late payment of the VAT due for the period ending 30 November 2002.

The payment was due on the normal rules by 31 December 2002. The Appellant however paid by BACS for which an extension of 7 days is allowed under Notice 700 paragraph 21.3.1.

On 7 January 2003 following an instruction by an employee of the Appellant, the Appellant's bank remitted the VAT due, which was £55,792.29 to the Inland Revenue.

Mr Lang told us that the employee had keyed the Inland Revenue number onto the computer instruction to the bank rather than that of Customs. The employee had an onerous job paying about 50 staff weekly and had made an error under pressure. The bank had sent someone to explain how to use the BACS system. We accept his evidence.

Mr Holl said that the fact was that the payment was late. Simple forgetfulness was not a reasonable excuse. It would be very difficult to administer the VAT system if an innocent error of this type was to be distinguished from other examples of carelessness. The requirement was to pay the Controller. He said that no reasonable excuse had been shown.

Mr Lang said that the government had its money on the correct day. a surcharge of over a thousand pounds was excessive for a clerical error.

We reserved our decision pending the decision of the Tribunal in Greengate Furniture Ltd v Commissioners of Customs and Excise where the question of proportionality of the default surcharges regime was consideration.

The decision in Greengate has now been issued as Decision No.18280. In that case the Tribunal considered that a reduction in at least some of the surcharges would have been appropriate if the Tribunal had power to mitigate. After extensive submissions from counsel for the Commissioners and counsel appointed as Advocate to the Court, the Tribunal decided that the absence of power to mitigate did not infringe the requirement for proportionality under the European Convention of Human Rights.

We accept that the penalty in this case is heavy for a simple error and consider that mitigation would be appropriate if within own power. However no reasonable excuse has been shown and we have no power to mitigate. The appeal must therefore be dismissed.

THEODORE WALLACE

CHAIRMAN

RELEASED:

LON/2003/233