United Kingdom VAT & Duties Tribunals Decisions

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You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> Elgar Hotel Worcester Ltd v Revenue & Customs [2006] UKVAT V19579 (19 May 2006)
URL: http://www.bailii.org/uk/cases/UKVAT/2006/V19579.html
Cite as: [2006] UKVAT V19579

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Elgar Hotel Worcester Ltd v Revenue & Customs [2006] UKVAT V19579 (19 May 2006)

19579

LATE REGISTRATION PENALTY — rule 26(2) — TOGC — failure to register on transfer — no reason given — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

ELGAR HOTEL WORCESTER LIMITED Appellant

- and -

THE COMMISSIONERS FOR

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Lady Mitting (Chairman)

John D Kippest

Sitting in public in Birmingham on 6 April 2006

The Appellant was not represented

Sara Williams, counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2006


 


DECISION

1. The decision under appeal is that of the Commissioners to impose a penalty for late registration under Section 67(1)(a) VAT Act 1994. The penalty was notified on 9^th July 1994 and was in the sum of £945.00, taking into account 25% mitigation. When the case was called on for hearing, there was no representation on the part of the Appellant and nothing had been heard from him. Having satisfied ourselves the notice had been properly served, we proceeded to hear the appeal under rule 26(2) of the Value Added Tax Tribunals Rules 1986. We would at this stage draw the attention of the Appellant to its rights, under rule 26(3), to apply as appropriate, to have this decision set aside. We heard no oral evidence but were referred to a witness statement of Ms Tammy Edwards, officer, of HM Revenue & Customs, the witness statement having been served and not challenged.
2. Ms Edwards was a member of the Belated Notification Penalty section. On 23 March 2004 the Respondents received an application for registration from the Appellant. The form had been completed by its sole director, Mr Benjamin Tabary-Davies. The form stated that the business had been transferred as a going concern on 19 May 2003 and registration was requested from that date. This therefore was the effective date of registration which was allocated to the Appellant. The transferor had been the Elgar Hotel Limited, of which Mr Tabary-Davies was also sole director. The Respondents established that the Elgar Hotel Limited, the transferor, had been trading over the VAT threshold and therefore the Appellant was liable to be compulsorily registered with effect from the date of transfer of the business.
3. By letter dated 24 May 2004, the Respondents wrote to the Appellant advising of its liability to a late notification penalty and inviting it to provide its net tax liability so that an accurate calculation of the penalty could be made. No reply was received and the Respondents therefore based the calculation on the estimated annual turnover declared in the VAT 1. The penalty was mitigated by 25 per cent in recognition of the Appellant having notified the Respondents of its liability to be registered without prompt. A return was issued to the Appellant for the first period of 19 May 2003 to 30 June 2004. The return was not rendered and a computer assessment was generated assessing tax due at £3,044. On 8 October 2004, the Respondents received an application to cancel the registration with effect from 31 August 2004 stating that the Appellant had ceased trading on that date. A final return was issued for July and August 2004. This was not rendered either and a further computer generated assessment was issued in the sum of £2,073.
4. The Appellant in its Notice of Appeal appealed not only against the penalty for late registration but against the assessments. No returns had been received from the Appellant until shortly before the tribunal hearing. The returns now filed confirmed that the Appellant was trading over the threshold. The receipt of the returns enabled the Respondents to correctly assess the tax due and they therefore had the effect of automatically cancelling the centrally issued assessments, which therefore stand vacated. We do not therefore have to deal with the appeal against the assessments.
5. Apart from the Notice of Appeal, nothing has been heard from the Appellant in relation to the appeal by either the tribunal centre or the Respondents. The grounds of appeal given in the Notice of Appeal are "the co. did not reach the threshold for VAT".
6. The Respondents registered the Appellant at its own request from the date it requested. This was the date of the transfer to the Appellant. The transferor had been trading over the threshold; the VAT 1 refers to a turnover well in excess of the threshold and the returns now submitted also show that the threshold had been exceeded. There is therefore no doubt that the Appellant was correctly registered. The Appellant was compulsorily registerable with effect from the date of transfer but the transfer was not notified to the Respondents at the proper time. A penalty for late notification was therefore again quite properly issued. No reason has been given for the late application for registration and we can do nothing but uphold the penalty. We see no reason to give any more mitigation than has already been given. The appeal is therefore dismissed.
7. Miss Williams made an application for costs in view of the failure of the Appellant to attend to pursue his appeal and we therefore direct that the Appellant should pay the Respondents' reasonable costs, such costs to be agreed if possible and, in default of agreement, to be fixed by a tribunal chairman sitting alone.

LADY MITTING

CHAIRMAN
Release Date: 19 May 2006

MAN/05/0475