United Kingdom VAT & Duties Tribunals Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/2008/V20625.html
Cite as: [2008] UKVAT V20625

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Bailie Hotels Ltd v Revenue & Customs [2008] UKVAT V20625 (18 March 2008)

20625

Notice of requirement to give security – Subsequent payments – Reasonableness of notice – Appeal dismissed

MANCHESTER TRIBUNAL CENTRE REF : MAN/07/1038

BAILIE HOTELS LIMITED

Appellant

-and- THE COMMISSIONERS FOR HER MAJESTY'S REVENUE AND CUSTOMS

Respondents

Tribunal : Mr. Ian Huddleston (Chairman)

Mrs. Joan Whiteside (OBE)

Sitting in public in Belfast on 21st February 2008


 


DECISION

The Appeal

1. This is an Appeal under Section 83(1) of the Value Added Tax Act (1994) by the Appellant against the Respondents service of a notice requiring Security issued pursuant to Schedule 11, paragraph 4(2)(a) under which the Appellant was required to give Security in the sum of £64,381, if quarterly returns were to be submitted, or £49,991 if monthly returns were to be submitted.
2. The Notice of Requirement itself was contained in a letter dated 9^th July 2007.
3. There was no appearance by or on behalf of the Appellant, but the Tribunal noted that the Notice of Listing had been served on the Appellant's representatives on the 28^th November 2007. The Tribunal decided to proceed in the absence of the Appellant under Rule 26(2) of the Tribunal Rules 1996 (as amended).
4. Evidence was heard from Mr. Edward Joseph McMahon, a Higher Officer HMRC, based at the Customs House, Belfast and being the person responsible for issuing the Notice of Request.

Evidence

5. Mr. MacMahon gave evidence as to the trading history of the Appellant and as to the grounds which had led him to taking his decision to serve the notice requiring security. From his sworn evidence the decision appeared to be based on the following facts:

the Appellant had been registered for VAT with effect from the 1^st September 2000 under registration number 761 0434 57;

at the time of the Notice of Requirement, all outstanding returns had been submitted, however payments for periods 08/06, 11/06 and 02/07 were outstanding with a debt due to HMRC in excess of £21,200;

sixteen VAT returns had been submitted late;

VAT for the periods 08/06, 11/06 and 02/07 remained unpaid;

twenty default surcharges had been recorded against the Appellant;

there were a number of failed Time to Pay arrangements;

the Appellant operated a cash business.

Mr. MacMahon gave evidence that, taking all of these factors into consideration, he had taken the decision to issue the Notice of Requirement.

6. By a letter dated the 31^st July 2007 the Appellant's Representative had requested a reconsideration of that decision but, on review, the decision was upheld.
7. Mr. MacMahon further gave evidence that he had continued in correspondence with the Appellant through his representatives and, as a consequence, the Appellant had recently paid £50,000 in respect of VAT and arrears which were due to HMRC. As a consequence the Notice of Requirement for quarterly returns had been reduced to £28,781. A copy of a letter which had been sent to the Appellant's representatives dated the 4^th December 2007 confirmed that position was produced to the Tribunal.
8. The Tribunal was referred to a Schedule which detailed the record of compliance and statement of account of the Appellant as at the 9^th July 2007, together with a Certificate of Debt issued pursuant to paragraph 14(1)(d) of Schedule 11 of the VAT Act 1994.
9. This Schedule confirmed the evidence adduced by Mr. MacMahon in all material respects.

Submissions

10. Mr. Haley made the following submissions to the Tribunal:

that the VAT record of the Appellant had been poor, as based on the evidence of Mr. MacMahon, and the Schedule formally adduced to the Tribunal;

it was acknowledged that the payment of £50,000 and, indeed, payments subsequent to the issue of the Notice of Requirement had been encouraging, but Mr. Haley submitted that these were not matters which were before the Tribunal, nor should they be brought into account in terms of assessing the reasonableness or otherwise of the Respondent's decision to issue the Notice of Requirement.

Decision

11. The Tribunal's jurisdiction in this case is limited to considering the facts which existed at the time when the challenged decision was taken – in this case July 2007. At that point, based on the evidence of Mr. MacMahon and the record of compliance and statement of account as at 9^th July 2007, it appeared to the Tribunal that the Respondents had acted reasonably in taking the decision which they had taken and demanding payment of Security.
12. Whilst it was encouraging that the Appellant had made efforts to bring its VAT payments and returns submission into compliance, those subsequent actions were not technically matters which should be brought into account in reviewing the original decision.

On that basis the Appeal would be DISMISSED

No order as to costs.

Note – under Rule 26(3) of the Value Added Tax Rules 1986 (as amended) the Tribunal may set aside any decision or direction given in the absence of a party on such terms as it thinks just, on the application of that party, or of any other person interested, served at the appropriate Tribunal Centre within fourteen days after the date when the decision or direction of the Tribunal was released.

Chairman : Ian Huddleston Release Date : 18 March 2008