United Kingdom VAT & Duties Tribunals Decisions

 


Brooklands Hotel Scarborough Ltd v Revenue and Customs [2006] UKVAT V19445 (02 February 2006)

19445

DEFAULT SURCHARGE — no one appearing — Appellant wished to register under the annual accounting system — scheme not activated at due date for payments — payments late — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

BROOKLANDS HOTEL SCARBOROUGH LIMITED Appellant

- and -

THE COMMISSIONERS FOR

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: David S Porter (Chairman)

Elizabeth M Pollard

Sitting in public in York on 30 November 2005

The Appellant did not appear and was not represented

Richard Manley, counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2006

DECISION

1. Brooklands Hotel Scarborough Limited (the Appellant) appeals against surcharges in the sums of £674.23 dated 31.8.04 for the period to 30.6.04 and £1999.80 dated 15.10.04 for the period to 30.9.04 arising from the Appellant's belief that it was registered under the annual accounting scheme
2. Richard Manley of counsel instructed by the acting solicitor for H M Revenue and Customs appeared for the Respondents and produced a bundle of documents for the Tribunal. 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).
3. We find the following facts. The Appellant completed the form to join the annual accounting scheme on 3 March 2004 and asked that its annual accounting year should end on the last day of July. The form was not returned until after 20 August 2004 as evidenced by an acknowledgement stamp impressed on the form dated 25 August 2004
4. In a letter dated 20 August 2004 David Southworth on behalf of the Appellant wrote: -

"In March 2003 (this presumably should have read March 2004) I spoke to the National Advice Service about registering for the annual accounting…. I rang another office and was advised that we would be placed on the annual scheme from May. I heard nothing further so presumed that we were subsequently registered and that our VAT payments would be taken from the Bank from September.

When I received the notice of surcharge … and rang Wolverhampton…I was informed that we were not registered and they would send out forms for registration…"

5. A letter dated 8 October 2004 eventually advised the Appellant that it had been accepted on the annual accounting scheme with effect from 1.09.04. The first accounting period would run from that date to 31.07.05 and monthly interim payments of £6095 would be payable on the last working day of each month commencing on the last working day in December 2004.
6. There was no justification for the Appellant to believe it had registered for the annual accounting scheme as the original application form could only have been returned after the 20 August 2004 in view of the Commissioners' date stamp.
7. The first surcharges of £674.23 arose in the period ending 30.6.04, before the Appellant had returned the form for the annual accounting scheme. The second surcharge arose before the Appellant had received confirmation that it was registered in the scheme and the Appellant must have been aware that that was the case.
8. In the circumstances we dismiss the appeal, as the Appellant did not have a reasonable excuse for failing to pay its VAT.
9. The Commissioners did not ask for any costs so none are awarded

DAVID S PORTER

CHAIRMAN
Release Date: 2 February 2006

MAN/05/0102