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	United Kingdom VAT & Duties Tribunals Decisions
You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> Lansdowne Building Contractors Ltd v Revenue & Customs [2008] UKVAT V20734 (04 July 2008) URL: http://www.bailii.org/uk/cases/UKVAT/2008/V20734.html Cite as: [2008] UKVAT V20734

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20734

VALUE ADDED TAX – default surcharge – no evidence as to reason for shortage of funds – no reasonable excuse – appeal dismissed

LONDON TRIBUNAL CENTRE

LANSDOWNE BUILDING CONTRACTORS LTD Appellant

and –

THE COMMISSIONERS FOR HER MAJESTY'S REVENUE & CUSTOMS Respondents

Tribunal: MISS J C GORT (Chairman)

MRS R S JOHNSON

Sitting in public in London on 21 May 2008

There was no appearance by or on behalf of the Appellant

Mrs G Orimoloye for the Respondents

© CROWN COPYRIGHT 2008


 


DECISION

1. This is an appeal against default surcharges for the periods 03/07, 06/07 and 09/07. Because there was no appearance by or on behalf of the Appellant this appeal was heard under the provisions of rule 26(2) of the VAT Tribunals Rules 1986.
2. In respect of the period 09/07 the due date was 31 October 2007. The return for this period was received by the Commissioners on 2 November 2007, there was no cheque with the return. The return was received on 19 November 2007, and subsequently a Mrs S Ryan, the company secretary of the Appellant company wrote to the Commissioners asking to appeal against the surcharge in the sum of £754.98 incurred in respect of that period. The grounds of appeal were that a cheque had not been enclosed with the VAT return and it was thought that the surcharge and the cheque may have crossed in the post.
3. In the Notice of Appeal to the Tribunal it is said that the previous late returns (for the periods 03/07 and 06/07) were due to large corporate companies withholding payment. Consequently the Commissioners wrote to the Appellant asking for further information about that aspect in order that the matter might be reviewed.
4. In respect of the period 03/07 the return was received on 8 June 2007 and payment was received on 21 June 2007, the due date being 30 April 2007. In respect of the period 06/07 the return and the cheque were both received on 9 August 2007, the due date being 31 July 2007. In reply to the Commissioners' letter the Appellant provided an aged debtor's analysis, a customer list, two documents from the NatWest Bank showing an overdraft limit of £40,000 up until 4 April 2007 and a limit of £50,000 up until 4 April 2008, bank statements, a day-book, bank receipts, and day- book customer receipts.
5. The Commissioners analysed the documents provided and came to the conclusion that in respect of the period 03/07 the Appellant had receipts of some £203,000 between 4 January 2007 and 29 March 2007 which was well in excess of the value added tax due for the period which was £16,108.04. It was also noted that the Appellant had a wide client base and was not solely relying on a few clients.
6. In respect of the period 06/07, £118,000 had been received, and again this was well in excess of the declared output of £3,941.33.
7. With regard to the period 09/07, the Appellant had not disputed that he had sent in the payment late, but from the bank statement it appeared to us that at the time he had insufficient funds to make the payment. He had an overdraft limit at the time of £50,000, and a statement showed that he was overdrawn to the tune of £40,658.26. Had the VAT cheque for £15,099.63 been presented at that time he would have exceeded his overdraft limit of £50,000.
8. At the conclusion of the hearing we announced our decision to dismiss this appeal on the basis that the Appellant has not established any reasonable excuse for late payment in respect of any of the periods we have considered. In respect of both the period 03/07 and 06/07 there was no evidence that the Appellant was short of funds, and, in particular no evidence as to the claimed reason for any alleged shortage. In respect of period 09/07 there was simply no reasonable excuse: the Appellant submitted his claim late and gave no reason for so doing. On the facts it appears that the Appellant had insufficient funds available at the relevant time. Insufficiency of funds alone does not constitute a reasonable excuse.
9. There is no order for costs.

MISS J C GORT

CHAIRMAN

RELEASED: 4 July 2008

LON 2008/0168