United Kingdom VAT & Duties Tribunals Decisions

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You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> Hannan v Revenue and Customs [2006] UKVAT V19471 (22 February 2006)
URL: http://www.bailii.org/uk/cases/UKVAT/2006/V19471.html
Cite as: [2006] UKVAT V19471

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Hannan v Revenue and Customs [2006] UKVAT V19471 (22 February 2006)

19471

DEFAULT SURCHARGE – Reasonable excuse – Late payment – Whether fault of bank – No – Appeal dismissed

LONDON TRIBUNAL CENTRE

JOHN HANNAN Appellant

and –

THE COMMISSIONERS FOR HER MAJESTY'S REVENUE & CUSTOMS Respondents

Tribunal: STEPHEN OLIVER QC (Chairman)

MR S K DAS LLM, ACIS

Sitting in public in London on 15 February 2006

The Appellant was not represented

Mr Michael Chambers for the Respondents

© CROWN COPYRIGHT 2006


 


DECISION

1. Mr Hannan appeals against a default surcharge of £422 for the 07/05 period. The due date for payment was 31 August 2005, the date payment was received by Customs was 12 September 2005.
2. When the appeal was called on for hearing there was no attendance by Mr Hannan. We attempted to contact him to see what his intentions were but his telephone was recording messages only. We decided to go ahead and hear the appeal, bearing in mind that Mr Hannan had set out his grounds of appeal in a letter of 20 September 2005 to which we will refer later. We have decided the matter against Mr Hannan and dismissed his appeal. Mr Hannan should know that the Tribunal is entitled to go ahead and hear an appeal in the absence of a party. That party has, however, the right to apply to the Tribunal within 14 days to have his appeal dealt with in whatever manner is fair and just in the circumstances. If Mr Hannan chooses to take this course, he will have to attend the application in person, otherwise the Tribunal cannot hear it.
3. Mr Hannan's case is set out in a letter of 20 September 2005. This includes the following passage:

"I apologize for the payment arriving late by one week. This happened due to a banking error at our bank Alliance & Leicester who had problems with BACS submissions on payments submitted on September 5 2005 which were not sent. I have enclosed a printout from our on-line banking which shows that as far as we were concerned the payment have been sent on time and which clearly shows the debit date of 7 September 2005 which is the date the payment is due. It took a week for us to realize what had happened and soon as it was clear that the payment had not been sent our bank sent the payment to you via CHAPS same day without any charge to us as it was their mistake."

4. The printout referred to in that letter shows a "debit date" as 7 September 2005. It also notes that "Status" is "Accepted". The case for the Customs is that they received payment on Monday 12 September 2005. This is recorded by them in their letter of 13 October 2005 and has been supported by a "Vision" ledger entry showing receipt on that date. The BACS system, we are told (and we accept), works on a three working day clearance basis. If Wednesday 7 September 2005 was the start date for the payment arrangements, then payment would not have been received by the Customs until Monday 12 September, allowing for 10 and 11 September being non-working days. We were also pointed to a letter from the Customs dated 18 January 2006 stating that they had reviewed Mr Hannan's appeal and were asking him to supply further information. He was asked to tell the Customs the date and time that

he had instructed his bank to make the payment. He was asked to confirm that if payment was made in time on 5 September then it would have been cleared into the Customs' account by 7 September. He was asked for details of any problems that the bank had experienced which had prevented them from sending Mr Hannan's payment on 5 September. There appears to have been no response to any of those enquiries.

5. If it be right that the status of Mr Hannan's direction to make a payment to the Customs was accepted on 7 September 2005, payment would inevitably have been received by the Customs late. Even if the BACS order have been placed on Monday 5 September, it would not necessarily have reached the Customs by 7 September; there is, however, no evidence of any sort that supports Mr Hannan's claim that the payment order was made on 5 September. For those reasons we cannot accept Mr Hannan's case that payment was made on time.
6. A further oddity about this case is this. In Mr Hannan's letter of 20 September 2005 he says that as soon as it had become clear that payment had not been sent to the Customs, his bank had sent payment to the Customs via CHAPS the same day. Mr Hannan did not (so the letter says) realize until at least 12 September that the BACS payment order had not been activated. What happened to the BACS order? Was the CHAPS arrangement a duplication? Those are complications which Mr Hannan might have been able to explain to us had he attended the hearing. His absence from the hearing has made it impossible for us to do other than dismiss his appeal.
7. Appeal dismissed.

STEPHEN OLIVER QC

CHAIRMAN

RELEASED: 22 February 12006

LON/05/1147