United Kingdom VAT & Duties Tribunals Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/2004/V18884.html
Cite as: [2004] UKVAT V18884

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Conseratory Centre & Greenhouse Supplier Ltd v Customs and Excise [2004] UKVAT V18884 (29 December 2004)

18884

SECURITY — company formerly run by father — poor compliance — failure to respond to warning letters or provide evidence of grounds for past failures — appellant failed to attend hearing having paid £3840 security required — commissioners had acted reasonably — case dismissed

MANCHESTER TRIBUNAL CENTRE

THE CONSERVATORY CENTRE &

GREENHOUSE SUPPLIER LIMITED Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: Mr D S Porter (Chairman)

Mrs R Dean (Member)

Sitting in public in Manchester on 23 June 2004

The Appellant did not appear and was not represented

Mr R Mansell of counsel appearing for the Respondents

© CROWN COPYRIGHT 2004


 


DECISION
1. By a Notice of Appeal dated the 23^rd September 2003, The Conservatory Centre & Greenhouse Supplier Limited (the Appellant) appealed against the notice of requirement to give security under paragraph 4(2) of Schedule 11 of the Value Added Tax Act 1994, requiring the sum of £3840 to be deposited if monthly returns were to be submitted.

The Parties

2. Mr R Mansell of counsel appeared for the Respondents and produced a bundle of copy documents and called Mr I Pumfrey a senior officer in the security division at Chesterfield. As no one appeared for the Appellant, this Tribunal determined to proceed under rule 26(2) of the Value Added Tax Rules 1986 (as amended).

The facts

3. The Appellant is registered for Value Added Tax purposes with effect from the 1^st June 2001 under registration number 772 1266 34.
4. Mr Pumfrey took the oath and confirmed that he had been brought into the case by the Debt Management Unit, who had been investigating the MPA group of companies, which were owned (with others) by Michael Brian Paice. He referred the Tribunal to the list of defaults on page 3 of the bundle. These showed that: -

MPA Leisure Buildings Limited had gone into liquidation owing £11,359.48

MPA Buildings Limited owed £518.82

MPA Group Limited owed £8490.18

Michael Brian Paice as a sole trader owed £152,512.86, which had been the subject of an appeal, on the basis that there were varying levels of zero-rating. The matter had been determined with a reduction of the amount owing.

The appellant owed £5405.55

Certificates of the non-compliance as above were provided to the tribunal.

5. The record of compliance at the date of the requirement for Click 4 Web Limited (the previous name of the Appellant) is set out on page 15 of the bundle this reveals that the appellant was consistently in arrears with its payments and its returns.
6. Correspondence had passed between Mr Pumfrey and Messrs Jones Burns & Davies Accountants to the Appellant, who advised that the failures arose from the installation of a new "Sage" software system in July 2001, which was upgraded in October/November 2002. This made the preparation of the Value Added tax returns difficult. Further Mr Nicholas Paice had taken over from his father and, although a director of the Appellant he had had no management involvement with the other companies in the group. In spite of several letters to the Accountants Mr Pumfrey had not received any detailed reply to his requests. As a result he issued the Notice of Requirement to provide security in the sum of £3840 on the 25^th February 2003.
7. On the 23^rd June 2003 the appellant agreed to pay the security by three instalments; 24/06.03 £ 500; 03/07/03 £1420; and 10/07/03 £1920.
8. We find as fact the matters set out in paragraphs 1 to 5 above.

The summing up

9. Mr Cannan submitted that the Tribunal had to consider the facts before Mr Pumfrey, who was the security officer in February 2003, when the decision to require security was made. The appellant had been given every opportunity to explain the circumstances of the failure to pay its Value Added Tax and had failed to do so. In spite of suggesting that the company had always paid punctually and without problems, out of the 11 VAT returns it had made since it registered only 3 had been rendered on time. There had been no difficulty with the returns when the appellant expected a repayment. In all the circumstances Mr Pumfrey was right to require the security as there was at the time a very real risk that the VAT would remain unpaid.

Decision

10. My colleague and I have considered the facts and we find that Mr Pumfrey acted reasonably when he required the security of £3840. We therefore dismiss the appeal.
11. As the appellant failed to attend the appeal to day and did not provide any reason for its non-attendance we award costs of £200 to the respondents.

D S PORTER

CHAIRMAN
Release Date: 29 December 2004

MAN/2003/0706