United Kingdom VAT & Duties Tribunals Decisions

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You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> Lookers Ellesmereport Ltd v Customs and Excise [2004] UKVAT V18770 (23 September 2004)
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Cite as: [2004] UKVAT V18770

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Lookers Ellesmereport Ltd v Customs and Excise [2004] UKVAT V18770 (23 September 2004)

18770

VAT — REPAYMENT SUPPLEMENT — whether on facts 30 days elapsed between Customs receiving appellant's repayment return and their making repayment of amount due — finding that over 30 days did elapse — appeal allowed

MANCHESTER TRIBUNAL CENTRE

LOOKERS ELLESMERE PORT LTD  Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Mr J D Demack (Chairman)

Sitting in public in Manchester 19 August 2004

Mr N E Gibbon solicitor for the Appellant

Mr J Cannan of counsel instructed by the Solicitors office of HM Customs and Excise for the Respondents

© CROWN COPYRIGHT 2004


 


DECISION

1. On or about 21 October 2003, the appellant company, Lookers North West Ltd ("Lookers"), submitted its VAT return for period 09/03 to the Commissioners of Customs and Excise. The return, in which Lookers sought repayment of £518,917.67, was received by the Commissioners on 23 October 2003. By section 79 of the Value Added Tax Act 1994 they then had 30 days in which to process the return if they were to avoid having to add a repayment supplement to the repayment itself. In the event, they authorised repayment on 8 December 2003, and the payment, made by BACS, was received by Lookers bankers on 11 December 2003.
2. It is common ground that certain days between 23 October 2003 and 11 December 2003 must be left out of account in determining whether 30 days elapsed in processing the repayment. For reasons which will shortly become apparent, the Commissioners contend that the period from 26 November 2003 to 4 December 2003, and from 8 December 2003 to 11 December 2003 should be ignored, whereas Lookers maintains that at least some of the days between 17 November 2003 and 26 November 2003 should be taken into account, as should the period from 8 December 2003 to 11 December 2003. But, viewed from the Commissioners' position, 29 days have to be taken into account, so that even the addition of 2 days will result in repayment supplement being payable.
3. I take the facts from the parol evidence of Mr I C J McCabe, the accountant for Lookers, Mr C J Turton, a senior assurance officer of the Commissioners, and Mr D M Parsons, a technical officer of the Commissioners, the witness statements of Messrs N P Bowker and D Mullard, both of whom are officers of the Commissioners, and an agreed bundle of copy documents. Most of the facts are, in any event, agreed, so that I may deal with them relatively quickly.
4. As I have already explained, Lookers return for period 09/03 claiming £518,917.67 was received by the Commissioners on 23 October 2003. It generated an electronic repayment query which was received by the RBS North Credibility Sift Team at Liverpool on 2 November 2003 Mr Mullard dealt with it, enquiring of the motor vehicle dealer visits department whether a visit was required to verify the return. On being advised that it was, early on the morning of 5 November 2003 Mr Mullard forwarded the query to Mr Turton for his attention
5. In evidence, Mr Turton explained, and I accept, that the Commissioners had no team of officers to deal with pre-credibility queries but that he was one of a number of officers who, once a year for a two week period, dealt with them. He added that at the time Lookers return required verification he was not dealing with pre-credibility queries, but that the matter was allocated to him solely because he dealt with motor vehicle dealers. He was required to deal with the matter whilst also covering his ordinary workload, much of which necessitated visits to traders resulting in his being out of the office most of the time.
6. Mr Turton did nothing about the matter until 17 November 2003 when he claimed first to have become aware of the query. He telephoned Lookers and tried to speak to Mr McCabe. Mr McCabe was not available and so, to quote from a witness statement which formed Mr Turton's evidence in chief, "I left an urgent message with a female member of staff to advise him of the need for the return to be verified prior to repayment being made "and for him to "phone me back as soon as possible" As evidence was adduced that the telephone call in question lasted a mere 14 seconds, I have grave doubts about the content of Mr Turton's message, but do accept that it was made. No return call was made by Mr McCabe, so that the same afternoon Mr Turton again telephoned Lookers and in a call lasting 1 minute 13 seconds invited Mr McCabe to return the call. (In his evidence to me, Mr Turton admitted that in his statement the two calls "might" have been reversed, i.e. that the former was a very short call restricted to his being told that Mr McCabe was not available, and only in the second one did he ask for Mr McCabe to return the call. I view his evidence in that behalf as symptomatic of a casual and unstructured approach by the Commissioners' Liverpool office to dealing with repayment claims, and one which has considerable influence on the outcome of this appeal).
7. In his evidence, Mr McCabe explained that Lookers have two telephone operators who take a note of any incoming telephone message and place it on the desk of the intended recipient. He said, and I accept, that he received a note of neither of Mr Turton's calls. Mr McCabe did, however, accept that on occasion messages went astray.
8. As Mr McCabe knew nothing of Mr Turton's calls, he did not respond to them as requested. It was not until 26 November 2003, when Mr Turton was on leave, that he decided to call Mr McCabe on his (Mr Turton's) mobile telephone to arrange a verification visit to Lookers. For reasons which neither Mr McCabe nor Mr Turton could give, the visit did not take place until 4 December 2003.
9. When it did take place, Mr Turton was quickly satisfied that the repayment was due. (It was caused by Lookers self-registering 213 Vauxhall vehicles on 30 September 2003). Consequently, he immediately confirmed that repayment was in order, and his superior within the Commissioners authorised it.
10. On 8 December 2003 a repayment authority was actioned by the Commissioners and a bank giro was authorised. Repayment was made by BACS, and the repayment claimed was credited to Lookers' bank account on 11 December 2003
11. Both Mr Gibbon, solicitor for Lookers, and Mr Cannan, counsel for the Commissioners, addressed me at length on the case law relating to repayment supplement. But since Mr Cannan accepted that it would be a question of fact for me to decide whether the Commissioners conducted the pre-credibility enquiry reasonably, I am able to dispose of the appeal without a detailed consideration of the case law.
12. No explanation was forthcoming for the failure of Mr Turton to do nothing with regard to the repayment claim between 5 November 2003 and 17 November 2003 (a period of 12 days), but since Mr Gibbon took no point on his failure, nor do I. But it is a factor I take into account in arriving at my conclusion.
13. I am not satisfied on the evidence that Mr Turton's message to Mr McCabe of 17 November 2003, accepting that his call was made on that date, was delivered with that clarity and urgency the matter clearly warranted. In dealing with claims so important to taxpayers such as Lookers, it is essential that the Commissioners have in place systems which not only indicate to taxpayers when enquiries have begun into repayment claims but that their help and co-operation in verifying returns is urgently needed. And if, for any reason contact cannot be made with the taxpayer by telephone on first approach, then the matter should immediately be followed up by letter or, preferably in these days of electronic communications, by facsimile or e-mail. In the instant case, Mr Turton did nothing between 17 November 2003 and 26 November 2003 (9 days) when 12 days of the Commissioners' 30 day period had already been lost (see para 6 above) as a result of someone's (I do not necessarily blame Mr Turton) failure reasonably promptly to process Lookers' claim.
14. I am quite satisfied in all the circumstances that Mr Turton should have sought to get in touch with Mr McCabe at least 2 days before he did so, so that Lookers entitlement to repayment supplement is triggered. It follows that I allow the appeal.

DAVID DEMACK

CHAIRMAN

RELEASE DATE: 23 September 2004

MAN/04/0078