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Cite as: [2005] UKVAT V19170
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South Wales Home Care Ltd v Her Majesty's Revenue and Customs [2005] UKVAT V19170 (13 July 2005)
    V19170
    ASSESSMENT – Differences between turnover recorded in annual accounts and that declared in VAT returns – Difference explained as referable to exempt commissions received – No evidence produced by Appellant of any commission received
    INPUT TAX – Expenditure on refurbishing business premises for new sauna and massage business – New business never carried on by Appellant – No evidence adduced that refurbishment was for purposes of trade to be carried on by Appellant

    LONDON TRIBUNAL CENTRE

    SOUTH WALES HOME CARE LTD Appellant
    • and –

    HER MAJESTY'S REVENUE AND CUSTOMS Respondents

    Tribunal: ANGUS NICOL (Chairman)

    RICHARD CORKE FCA

    Sitting in public in Cardiff on 11 May 2005

    The Appellant was not represented

    Alistair Dougal, advocate, of Customs and Excise, for the Respondents

    © CROWN COPYRIGHT 2005
    DECISION
  1. This is an appeal against two assessments to VAT under section 73(1) of the Value Added Tax Act 1994, relating, first, to the periods 1/00 and 1/01 to 4/02, and secondly to the periods 4/00 to 4/01. The grounds of appeal set out in the notice of appeal were:

    2. "(1) To the extent that this assessment covers VAT on differences between VAT output values as per the VAT returns and the financial accounts - these differences occur because commissions income relating to financial agreements was received. This income is exempt from VAT.
    (2) Input tax has been disallowed on expenses incurred in the development/ refurbishment of a property intended for use for taxable supplies within the leisure industry. This input tax was deductible."
  2. At the hearing of the appeal in Cardiff on 12 May 2005 the Appellant company was not represented. Therefore the hearing proceeded without such representation in accordance with rule 26(2) of the Value Added Tax Tribunals Rules 1986. Under rule 26(3), the Appellant may make an application to the Tribunal to have this decision set aside and the appeal reinstated. Any such application must be made not later than 14 days after the date of release of this decision.

    3. The legislation
  3. Section 73 of the 1994 Act provides, so far as is relevant to this appeal:

    4. "(1) Where a person has failed to make any returns required under this Act ... or to keep any documents and afford the facilities necessary to verify such returns or where it appears to the Commissioners that such returns are incomplete or incorrect, they may assess the amount of VAT due from him to the best of their judgment and notify it to him."
    The facts
  4. In the absence of any representative of or witness for the Appellant, and in the absence of any further documentary evidence which such a witness might have been able to produce, the only evidence before us was that of Mrs Whiteley, an officer of Customs and Excise, and such documents as were already before the Tribunal. From the evidence before us, we found the facts to be as set out below. The statement of case is very long and detailed, and unusual in that it is largely written in the first person singular, apparently the narrative of Mr Alistair Dougal. But it contains a great deal of factual matter, and we derive some assistance from it in coming to the facts. Such facts as are in dispute we have taken from the correspondence.

  5. The first assessment was in the sum of £6,698 and was dated 2 January 2003. The dispute was in connexion with the disallowance of input tax which appeared to be in respect of refurbishment of premises, which added up to a total of £5,789. The second assessment, in the sum of £5,223, was dated 11 February 2003. It was based upon differences between the turnover shewn in the annual accounts for the two years ending on 31 March 2000 and 2001 and the turnover declared in the VAT returns. The second assessment was amended in May 2004, by reducing it to £3,951.

  6. The Appellant had carried on business selling vacuum cleaners, a trade which it discontinued with effect from 5 April 2001. The only apparent income after that date was rent from the letting of a cottage on land adjacent to the residence of Mr John Milton, the director of the Appellant. The last return which shewed any turnover was that for 4/01. The returns from 7/01 to 4/02 were repayment returns, totalling £5,005.50, all of which was repaid.

  7. On 16 July 2002, Mrs Roma Whiteley, an officer of Customs and Excise, visited Mr Milton's private address and carried out an inspection. Mrs Whiteley gave oral evidence at the hearing of this appeal. During this inspection, she examined the accounts for the years ending on 31 March 2000 and 2001, and compared them with the VAT books. The accounts for the year to 31 March 2000 shewed a turnover of £781,182. The turnover calculated from the VAT returns for the periods from April 1999 to March 2000 amounted to £700,056, indicating a deficiency of £81,126. An error appears to have crept into the calculations for the year to 31 March 2001. Having first entered the turnover according to the accounts in her notebook as being £292,207, Mrs Whiteley noted it as £275,814. But in making an accounts analysis report after the visit the first of those figures was restored. She calculated the turnover from the VAT returns for that year as £277,908, leading to a discrepancy of £19,802.

  8. At that time the Appellant's principal place of business was 266/268 Whitchurch Road, Cardiff, and Mrs Whiteley noted that it was the property of the South Wales Homecare Pension Fund, to which the Appellant was paying rent. A number of claims for input tax had been made relating to refurbishment of those premises. These amounted to £5,790.88. Some of those input tax claims were in respect of premises at 30 de Winton Street, Tonypandy, which apparently was not connected with the Appellant's business. Mrs Whitely noted that the only income since March 2001 had been rent from the cottage, and the only expenses for setting up a sauna/health club in Whitchurch Road. It was explained to her by Mr Milton that that was not the Appellant's business, only renting the building which was the pension fund's property. Mr Milton advised Mrs Whitely to speak to Mr Michel Woog, the Appellant's book-keeper. Mr Woog confirmed in a letter of 23 August 2002, that "The Executive Club" (where the sauna was installed) was no part of the Appellant's business.

  9. Mrs Whiteley wrote to the Appellant on 15 November 2002 explaining what matters she was proposing to include in an assessment, which included input tax claims made in respect of the Executive Health Club and output tax both over-declared and underdeclared. She also sought the views of the Appellant's then accountants, Bruce N Simmonds and Associates, as to the apparent discrepancies between the turn-over shewn in the accounts and declared in the VAT records, but received no response. On 11 February 2003, by which date Mrs Whiteley had had no response from Bruce N Simmonds, she wrote again to the Appellant setting out details of the assessment that she intended to raise. An assessment was raised in the sum of £5,223 relating to the discrepancies, notice of which was sent to the Appellant. This elicited a response from new accountants acting for the Appellant, Warwick Leaman, who asked, in a letter of 16 February 2003, for a reconsideration of the amounts assessed. The letter also explained that after the Appellant had ceased being a distributor of Kirby vacuum cleaners the rent for the premises still had to be paid and repairs were needed, so that the Appellant had to decide what to do with the premises. Amongst other suggestions was an executive sauna and massage establishment. The necessary work was authorised and completed within three months. Then, for personal reasons, Mr Milton, the director of the Appellant, decided that he would find someone else to take over the lease, and that he should close down the Appellant company. He received a number of offers. The letter went on to explain that the Appellant's Memorandum entitled the company to carry on several different types of trade, and asked how the Commissioners could justify disallowing legitimate business expenditure just because the core trade had changed.

  10. The review officer wrote to Warwick Leaman in response, and asked a number of questions about the premises. He wished to know who the owner was, and asked for a copy of the lease to the Appellant. He asked for confirmation that at the time the expenditure was incurred on the premises the Appellant intended to carry on the business of an executive sauna. He asked whether the transfer of the lease to another party who was operating the executive sauna involved an assignment of the lease, and for a copy of the assignment, and what the assignee had paid. Since the Appellant was no longer an active trading company, the review officer asked why no application for deregistration had been made.

  11. On 22 March 2003 Warwick Leaman wrote to Mrs Whiteley about the accounts discrepancies giving rise to the second assessment. The letter included the following:

    12. "The Company receives exempt commissions on sales put through a finance house, in the main AVCO Trust PLC. This commission is not shown in the sales day book, where VAT returns are generated, but on a received basis in the cash-book.... I do vaguely recall discussing these exempt commissions with another C&E officer during a visit at SWHC a number of years ago, but I am sure you would read the previous file notes prior to your visit, would you not?"

    The officer replied on 10 April 2003, asking for evidence of the commissions and an explanation of their nature, the amounts, and copies of relevant documents.

  12. Warwick Leaman wrote on 31 March 2003 to the review officer, in response to the letter of 10 March. That letter first said that both Mr Milton and Mr Michel Woog, the Appellant's book-keeper, had denied saying that any expenditure incurred by the Appellant was non-business. The letter said,

    13. "3. The lease transfer was purely on a gentleman's agreement basis between John Milton and the new tenants. No funds were transferred and the new tenants simply took over paying the rent directly into the landlord's bank account. Because the new tenants had their doubts as to the viability of such a business, they were reluctant at the start to commit to a formal agreement. As that business has been trading for a while now, Mr Milton is hopeful that the tenants will now commit to taking over the lease and this will hopefully be done in the coming months.
    4. SWHC does need to close down, but, as you are aware, with this VAT inspection still being resolved, the company will need to wait until it is concluded before being allowed to do so. The Inland Revenue has been informed that the company has ceased trading...."

    As to the query about the lease to the Appellant, a copy of the lease was provided. It was between the trustees of the South Wales Home Care Ltd Retirement Benefits Scheme (of whom Mr Milton was one) as lessors and the Appellant as lessee, for a term of ten years from 1 June 1995. The letter also confirmed that the expenditure incurred by the Appellant on the premises was for the establishment of the executive sauna, which the Appellant intended at the time of incurring the expenditure to operate.

  13. In a letter of 13 April 2003 Warwick Leaman said that the Appellant had an agreement with AVCO Trust PLC, which was a finance house, to arrange hire purchase facilities for customers, and that the Appellant received a commission for a concluded sale of about 7 per cent. The letter added that Mr Milton and Mr Woog would be happy to produce "the 1,000 or so finance commission statements" and take them to the Cardiff office of the Commissioners. Warwick Leaman also explained that £16,931 had been added to the sales for the year to 31 March 2000 after a previous VAT inspection, relating to sales to a distributor in Ireland, but the claim for the tax was dropped by Customs after evidence of shipping to Ireland had been produced.

  14. The review officer wrote again to Warwick Leaman on 22 April 2003 in response to the letters of 31 March and 13 April. He expressed Mrs Whiteley's view, based on the evidence provided, that the expenditure in refurbishing the premises was not incurred in the furtherance of the Appellant's business. After referring to section 24(1)(a) of the 1994 Act, the letter continued:

    15. "I cannot see how the setting up costs of a sauna, which SWHC simply allowed a third party to take over for no consideration, meets this definition and I consider the assessments to be justified. I would also state that, if the third party's agreement to take over the rental payments could be construed to be a payment in kind, which is not sufficiently evidenced at present, then output tax would be due at a minimum of the cost price of the goods and services."

    The review officer said that he did not require all of the statements relating to the commission payments, only one for each year together with details of the exact income from commissions for each year.

  15. On 11 June 2003 a letter was received by the Commissioners from C & C International VAT and Customs Consultants, who had been instructed to act for the Appellant. They said that they had submitted a notice of appeal for the Appellant, giving the following grounds:

    16. "1. The differences between declared VAT output values and the financial accounts is due to commissions income relating to finance agreements and that this income is VAT exempt.
  16. Input tax disallowed on expenses incurred in the development/ refurbishment of a property intended for use for taxable supplies within the leisure industry is deductible."

  17. On 28 August 2003 C & C was reminded that the review officer had asked for sight of the commission statements from AVCO and further information relating to the assignment of the lease, which had not yet been provided. On 8 October 2003 C & C wrote saying that they would be collecting all available material from the Appellant on 10 October. C & C wrote again on 22 October saying that they had received certain documents from the Appellant, who had also given a more detailed explanation of their financial affairs. The documents included a file of statements shewing income and copy leases for the premises, another was "an example of an invoice from the Kirby Cleaners Company which goes some way to explaining the differences that have occurred between the bank account, the accounts and the VAT returns". C & C then said that they needed further explanations from the accountants; they intended to provide the Commissioners, or the Tribunal, with a report and copy documents giving "substantial explanation for a substantial element of the outstanding assessments". They hoped that a settlement could be negotiated without recourse to the Tribunal.

  18. Further correspondence ensued between C & C and the review officer, culminating in a meeting on 11 February 2004 between Mrs Whiteley for the Commissioners and Mr Cowgill of C & C. (At this point, the statement of case is expressed in the first person singular; reference to the correspondence suggests that the narrator is Mr Alistair Dougal, and advocate of the VAT & Duties Tribunals Division of the Commissioners.) The pleading relates that Mr Dougal was informed that at the meeting the discussion was about the issue of the accounts discrepancies, no mention being made of the non-business receipts. No further documents were produced in support of the Appellant's contention that the discrepancies related to receipts of exempt commissions.

  19. On 17 May 2004 Mr Dougal wrote once more to C & C. Having reminded Mr Cowgill that the second of the two assessments had been reduced from £5,223 to £3,976, Mr Dougal turned to the discrepancies. The letter continued:

    20. "On a general point with regard to the differences between the accounts turnover figures and the VAT records, and with regards to your clients oft repeated contention that this is due to finance commissions received from AVCO Trust PLC (recorded in the cash book and therefore not finding their way to the VAT return figures), it seems to me, given the invitations they have had to do so, a very telling point that, thus far, they have singularly failed to come up with one single document from AVCO to back up their contention. Surely it would have been a relatively simple matter to provide something to Mrs Whiteley or the review officer? In his letter dated 22 April 2003 to the accountant, the review officer made it perfectly clear he would accept sight of just one commission statement from each year so this could hardly be construed as an onerous request."
  20. The letter went on to refer to the input tax claimed in respect of the work done on the premises to convert it to a sauna, and referring to the Appellant's claim, through Warwick Leaman and Mr Cowgill, that at the time when the work was done it was the genuine intention of the Appellant to operate the sauna and massage operation, Mr Dougal continued:

    21. "The correspondence I have seen, specifically from Warwick Leaman's letters dated q16 February 2003 and 31 March 2003, states that, ultimately, the newly refurbished sauna/massage establishment was, on a 'gentleman's agreement basis', handed over, without any consideration, to an unnamed third party who, it is said, just simply agreed to take over the rent payments to the lessor (the South Wales Homecare Ltd Retirement Benefits Scheme Trustees).
    It seems clear that, even if we are not looking at the disallowance of input tax on the refurbishment costs incurred by [the Appellant], we must, conversely, be looking at output tax due on the transfer of the premises to the third party. At the very least, your client has apparently incurred a gross cost of approximately £40,000 in fitting-out the establishment so, against that, the claim that it was just handed over without any form of recompense to some unspecified third party lacks credibility in my view."

    Mr Dougal then asked if the Appellant would object to a further stand-over in the appeal for six weeks, and for the production of a number of documents relating to the assignment of the lease and the identity of the assignee, and which might establish the actual intention of the Appellant to run the sauna and massage business itself.

  21. The response to that was a letter from C & C dated 18 May 2004, together with a letter from Warwick Leaman of 17 May, a copy of the trading and profit and loss accounts for the years to 31 March 2000 and 2001, a copy of the nominal ledgers for sales and commissions received for the year to 31 March 2000, and a sales summary for the year to 31 March 2001. Warwick Leaman's letter set out the following contentions:

    22. "Firstly, I see HMCE have changed the 'Sales from Annual Accounts' in 2001 to the sales only figure and not sales and commission as in their first assessment. Surely this sets the precedent for both years! If this is the case, I calculate that the 2000 assessment should reduce from 1848 to 334, which we should be able to get Michel to agree to.
    With regards to 2001 I believe HMCE have worked out their 'Sales from VAT Account' wrong. The original assessment for the months of February and March 2001 (04/01) showed sales of 20624 which agrees to the SDB of the company. Now they have changed this to 15,847! The total Sales from VAT Account should be:

    04/00 One month of April 2000 53954 Agreed

    07/00 Quarter to July 2000 103926 Agreed

    10/00 Quarter to October 2000 66204 Agreed

    01/01 Quarter to January 2001 37977(quarter with discrepancy)

    01/04 Two months Feb & Mar 2001 20624 Agreed

    _______

    282,685

    _______

    Our sales are as reported 292,207, giving a difference of 9522 - VAT element £1418."
    (We understand that the months February and March 2001 were the only trading months of the period 4/01. In the above table, the period "01/04" appears to be a mistake for "04/01".)
  22. The trading and profit and loss account for the year to 31 March 2001 shews sales of £292,207 and commissions received of £5,503. For the previous year the figures were £731,628 and £49,554 respectively. The sales summary, which lists the months from April 2000 to February and March 2001 inclusive, with the total receipts, VAT and net receipts, gives a total of net receipts of £292,207 with VAT of £50,300.37. The net sales for February and March 2001 are given as £20,368.95, with VAT of £2,728.67. The nominal ledger for the year to 31 March 2000 includes the following entries: "Sales summary £714,696", "Reverse Ireland Case VAT from 99 won by SWHC £16,931", the total being £731,627. Mr Cowgill's letter of 18 May 2004 was referred to a senior officer, Mr Brian Leyland, who answered it on 14 June 2004. He pointed out that the decision to reduce the assessment had been made before that information had been received. He said that it had not yet been established what the VAT liability in respect of the commissions might be. He asked again for documentary evidence and a full explanation as to what the commissions were. He pointed out also that the VAT of £2,728 in respect of the sales summary for February and March 2001 appeared wrong, as it should have been ££3,564.56. He dealt with the "Reverse Ireland Case VAT", which referred to the acceptance by the Commissioners that zero rating was appropriate after documentary evidence had been supplied, and expressed surprise that it had been included in net sales.

  23. Mr Dougal also replied to that letter, on 17 June 2004, agreeing with what Mr Leyland had said and adding the following:

    24. "Firstly ... I find it completely unbelievable, if the commissions received do indeed relate to finance agreements made via AVCO, that your clients have failed to come up with one single piece of hard evidence to back this up. Given the number of attempts we have made to elicit such information from them, and these are all documented, it is an understatement to say that we have been more than fair. Inevitably, perhaps only two conclusions can now be drawn - either the commissions received have nothing to do with finance agreements and, rather than being exempt for VAT purposes, are in fact standard rated or, alternatively, your client is being deliberately obstructive and tardy for reasons best known to themselves. We will, when and if necessary, make these points to any Tribunal.
    All the points raised in Warwick Leaman's letter of the 17th May could well be rendered completely meaningless if your client satisfied us on the more basic point of what exactly the commissions relate to. This is their last chance to do this.

    Mr Dougal then reserved the right of the Commissioners to reinstate the reduced assessment, since the turnover was established at £297,710 rather than £292,207, and also on the basis that, unless proven to be commissions on financial agreements, the amount said by the Appellant to be commission income would be treated as standard-rated. He also noted that he had had no response to the points raised in his letter of 17 May relating to the input tax claim. Finally, he said that he had applied for a further stand-over until 29 June 2004, by which time the Appellant should be able to supply all the requested information.

  24. A letter of 6 July 2004 from Warwick Leaman to Mr Cowgill was forwarded by the latter to Mr Leyland. As to the commission income, Mr Leaman said:

    25. "Finance commissions: there have been questions by every VAT inspector I have come across in the last 12 years as an accountant and every time they investigate the VAT aspect they come to the same conclusion that they are zero rated. I have pointed out a number of times that if a sale goes through Avco Trust plc for say £1,000 the company (SWHC) will receive a zero rated, self billed commission of around £70.00. I will ask Michel to contact Avco Trust to see if we can get some kind of letter from them."

    He also explains that Mr Woog's wages were in part invoiced to two other businesses, which may have caused an error in the VAT return. Thirdly, he gave the view that the assessment to VAT of £16,931 in 1999 had been accounted for by debiting sales in the profit and loss account and crediting the VAT liability account; on the assessment being withdrawn, the entry was reversed.

  25. In further correspondence, right down to April 2005, the Commissioners offered to contact AVCO Trust themselves to find out the true nature of the payments made, and asked for a contact name or number. No such information was ever given by the Appellant. It does appear that at some point, in or about April 2005, Mr Leaman on behalf of the Appellant told Mr Dougal that the papers or records were no longer available and that AVCO had refused to supply information because the Appellant was no longer a customer.

    26. The Commissioners' case
  26. Mr Dougal, who also appeared for the Commissioners, submitted that there were only two possible inferences to be drawn from the facts relating to the Appellant's turnover: either that the receipts said to be commission were not exempt commission, or that the Appellant for some reason was withholding the necessary information, to its own disadvantage. So far as the lease was concerned, the Appellant was the lessee of the premises from its retirement pension fund, and there had been no option to tax, so that the rent had been an exempt supply. No evidence had been produced, in spite of some 18 requests, to shew that the payments were exempt commission paid by AVCO, nor that the sauna and massage business was to be carried on by the Appellant. The probability, it was contended, was that there was no such intention, because after the refurbishment of the premises those premises had been handed over to an unnamed third party, apparently for no consideration, on the basis that the third party assumed responsibility for the payment of the rent. The inference to be drawn, in the absence of any evidence to the contrary, was that there had been no such intention.

    27. The Appellant's case
  27. We have done our best to gather the Appellant's case from the notice of appeal and the correspondence. However, the notice of appeal is couched in such bare terms that little can be gleaned from it save the basic contentions that the differences between the annual accounts and the VAT returns is the result of the receipt of commissions relating to financial agreements, and that the input tax relating to the expenses of development and refurbishment of the premises was deductible because it related to a property intended for use for making taxable supplies.

  28. In an exchange of correspondence with Mr Conyngham in March 2003, Mr Conyngham asked for information relating to the premises in Whitchurch Road, for confirmation that the Appellant incurred expenditure on those premises to establish the executive sauna which it intended to operate, and for an explanation of the transfer of the lease of that property. That seemed to have been understood as an allegation that the expenditure was for non-business purposes, and was adamantly denied by Mr Milton and Mr Woog, according to Mr Leaman's reply. That was the letter which explained about the "gentleman's agreement" as to the lease. The lease itself takes the matter no further. It is simply a lease by the pension fund trustees to the company, about which there seems to be no dispute. The rest of the correspondence, referred to above or through the statement of case, does no more than make assertions which, if proven, might well have established the Appellant's case. It is very unfortunate that the Appellant has produced no evidence, and that it was not represented at the hearing of the appeal in Cardiff. Such evidence as the Appellant might have produced, and which it might have produced to the Commissioners at any time during the last two years, has therefore not been before this Tribunal.

    29. Conclusions
  29. The first of the two assessments, dated 2 January 2003, was that which related to the disallowance of input tax in respect of the expenditure on the premises at Whitchurch Road. It appears to have been accepted that sums in excess of £38,000 were spent on turning those premises into a sauna and massage parlour, and it was that business which the Appellant contended that it intended to carry on. It had previously traded in the business of selling vacuum cleaners. If its Memorandum is wide enough, there is no reason that we can see why the Appellant should not make a change in its business to something very different from its previous trade. But the surrounding circumstances raised doubts in the minds of the officers of Customs and Excise involved in the matter, and we find those doubts understandable. It appears that, having carried out the development and refurbishment of the building the Appellant, to use a neutral term, changed its mind and got rid of the premises. The evidence relating to that was vague. We understand that a reason, perhaps the only reason, for that was that Mr Milton had personal difficulties which made such a change of mind necessary. But we have heard nothing more about that, nor about what actually happened. Apparently there was a gentlemen's agreement with some third party, unnamed, on terms which have not been disclosed save that they involved the payment of rent to the Pension Fund by the third party, at a date which has not been disclosed. It is difficult to understand why the facts have not been disclosed, and the Appellant's refusal to do so strengthens the doubts concerning the transaction and the Appellant's intentions. We share the Commissioners' view, that those doubts could readily have been dispelled by the production of evidence. This has not happened. We consider that the Commissioners' inference, that the Appellant did not intend to carry on the sauna and massage business, was reasonable, and we come to the same conclusion.

  30. The second assessment related principally to the differences between the turnover apparent from the annual accounts and that evident from the VAT returns. The explanation for the differences was that the turnover in the accounts included certain commissions paid by AVCO which, being related to financial agreements, were exempt, and therefore did not fall to be included in the VAT returns. That assertion is, of course, perfectly credible. For that reason, the Commissioners have repeatedly asked the Appellant for some evidence of the nature of the agreements for which the commissions were paid. It is difficult to imagine a more reasonable request. It was made many times from November 2002 onwards. Apart from assertions by Mr Woog or Mr Leaman that such commissions had always been treated as exempt, including by Customs officers on earlier inspections, nothing was forthcoming. Again, it is difficult to see why the Appellant should refuse to produce so small an amount of evidence, one document per accounting year, as was asked for. However, that was the result. Even if the documents no longer exist now, it appears that they did before, hence the reference in Mr Leaman's letter of 13 April 2003 to "digging out the 1,000 of so finance commission statements". We do not accept that AVCO would refuse to disclose such documents with the consent of the Appellant. The conclusion to which we are drawn in the absence of any evidence as to the existence of the commissions or to their VAT status is that, on the balance of probabilities, the payments were not exempt, and were rightly made the subject of the assessment.

  31. For the above reasons, this appeal is dismissed. The second assessment was amended on a number of occasions, and it appears to follow that the most recently amended assessment should be effective.

  32. The Commissioners asked for their costs of the appeal in the sum of £500. That seems reasonable to us, on the basis that if the evidence had been produced there would probably have been no need for any hearing at all, and if the evidence did not exist there is no reason why the appeal should not have been withdrawn, as was suggested in an exchange of e-mails at the end of April and beginning of May 2005. However, we have not heard the Appellant on the matter of costs. If the Appellant should wish to be heard, an application should be made on its behalf not later than 28 days after the date of release of this decision. Unless such an application is made by the Appellant, we direct that the Appellant shall pay the Commissioners' costs of the appeal in the sum of £500.

    33. ANGUS NICOL
    CHAIRMAN
    RELEASED: 13 July 2005

    LON/03/637

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