Case No: 2000/03432/Y3
Neutral Citation Number: [2001] EWCA Crim 2282
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CRIMINAL  DIVISION)
ON APPEAL FROM THE CROWN COURT AT SOUTHWARK
(His Honour Judge Rivlin QC)
Royal Courts of Justice
Strand, 
London, WC2A 2LL

Wednesday 31st October 2001
B e f o r e :

LORD JUSTICE HENRY
MR JUSTICE GOLDRING
and
MR JUSTICE TOMLINSON

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	REGINA		
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	CHRISTOPHER NIGEL ROBERTS		

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(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040,  Fax No:  020 7831 8838
Official Shorthand Writers to the Court)
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C Pugh Esq (instructed for the Appellant)
A Suckling Esq, QC & M Chawtal Esq (instructed for the Respondent)

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Judgment
As Approved by the Court

Crown Copyright ©

Mr Justice Goldring:
The conviction
1.	This is the judgment of the Court.  On 15 May 2000, at the Crown Court at Southwark, the appellant was convicted by a majority (11-1) of two counts of fraudulent evasion of Value Added Tax (“VAT”) contrary to section 72 of the Value Added Tax Act 1994 (the “Act”).  He was sentenced by His Honour Judge Rivlin QC to 9 months’ and 2 years’ imprisonment concurrently on each count.  He appeals against the conviction on count 2 by leave of the Single Judge.
The indictment
2.	Both counts alleged “Conduct involving the commission of one or more offences under section 72(1) and 72(3) of the [Act], contrary to section 72(8)…”  Count 1 charged the appellant alone.  Count 2 charged him with Frank Warren.  Frank Warren was acquitted.
3.	There were two sets of particulars on count 2.  Particulars (i), (iii) and (iv) related to the non-submission of VAT returns for specific quarterly periods.  We take particular (i) as an example.  The allegation was that the appellant and Mr. Warren, 
“... in relation to a business trading as Sports Network (Europe), so conducted [himself] in failing properly to account for [VAT] … in … not submitting a VAT return for the period 1 March 1996 to 31 May 1996, thereafter only paying the assessment claimed, namely £25,555, knowing the said assessment was lower than the true amount due and failing thereafter to account for the correct sum due…”
4.	Particular (ii) alleged that the return submitted
“for the period 1 June 1996 to 31 August 1996 was £445,972 when in truth and in fact the correct figure was at least £838,953…”
The relevant statutory provisions
5.	By section  1(1) of the Act VAT “... shall be charged … on the supply of goods or services.”  The VAT on any supply is a liability of the person making the supply, “... subject to provisions about accounting and payment.”  (Section 1(2))  “A person is a taxable person … while he is, or is required to be, registered under [the] Act.”  (Section 3(1)) 
6.	“A taxable person shall…in respect of supplies made by him … account for and pay VAT by reference to such periods (‘prescribed accounting periods’) at such time and in such a manner as may be determined by or under regulations…” (Section 25(1))
7.	Section 45 deals with partnerships.  It provides that the registration:
“... may be in the name of the firm; and no account shall be taken…of any change in the partnership.”  (Section 45(1))
There are further specific provisions concerning change of partners.
8.	Section 72 is titled “Offences.”  Section 72(1) states that
“If any person is knowingly concerned in, or the taking of steps with a view to, the fraudulent evasion of VAT … he shall be liable … to a penalty … or … imprisonment …”
9.	Section 72(3) states that 
“If any person … with intent to deceive produces, furnishes or sends … any document which is false in a material particular; or…in furnishing any information … makes any statement which he knows to be false in a material particular or recklessly makes a statement which is false in a material particular, he shall be liable …”
The background
10.	The appellant and Frank Warren were involved in boxing promotion.  They were shareholders in a company called Sports Network Limited.  In its application for VAT registration of 25 March 1993, its business activity was described as “TV/sponsorship/sports promotion.” (Appeal bundle pages 1 and 2).  The appellant was a director of that company.  It was the vehicle through which he and Mr. Warren staged boxing promotions.  Count 1 related to VAT returns submitted by that company for the two periods between 1 September 1995 and 31 March 1996.  The allegation was that they understated the amount of VAT payable.
11.	In February 1996, Frank Warren was disqualified from being a company director.  There was concern that he might be regarded as a shadow director of Sports Network Limited and therefore in breach of the disqualification.  It was decided to set up a partnership between him and the appellant to continue the boxing promotion previously carried on by Sports Network Limited.  The partnership was called Sports Network Europe (not, we emphasise, Sports Network (Europe).  Its partners were the appellant and Frank Warren.  The allegations in count 2 related to the VAT payable as a result of the boxing promotions put on by that partnership. The partnership effectively took over Sports Network Limited’s trading from 1 March 1996. (Appeal bundle page 10).  The first allegation on count 2 relates to the VAT return said to be due for the first quarter’s trading, of that partnership.  
12.	In about April 1995, the appellant and Frank Warren were anticipating putting on boxing promotions with the American promoter, Don King.  In order to do that, they set up a partnership called Sports Network (Europe).  On 24 August 1995 the appellant signed the Customs and Excise documentation for the registration of that partnership.  As was required, the partners were specified.  They were Sports Network (Europe) Limited (the vehicle as we understand it, for the appellant and Mr. Warren) and Don King Promotions of Oakland Park Florida (Mr. King’s vehicle).  The partnership was registered by the Customs and Excise under the number 651 1805 58 (“651”). (Appeal bundle pages 2A-6).  Nothing came of the arrangement with Don King.  The partnership never traded.
13.	We shall refer to Sports Network (Europe) as the first partnership, Sports Network Europe as the second partnership.
14.	Mr. Wolfson, the appellant’s and Mr. Warren’s accountant informed the Inland Revenue of the second partnership.  He did not, it is agreed, inform the Customs and Excise.  That was an oversight.  
15.	As we have stated, trading on the second partnership began on 1 March 1996.  Its turnover was such to mean that a VAT return in respect of it needed to be made.  No returns were submitted in respect of trading for the quarters 1 March 1996-31 May 1996, 1 September 1996-31 November 1996 and 1 December 1996- 28 February 1996.  However, assessments in respect of those three quarters were issued by the Customs and Excise on registration number 651 addressed to Sports Network (Europe) (the first partnership).  The appellant arranged the payment of those assessments by Sports Network Europe (the second partnership).  They were intended, it is agreed, to relate to its trading (the first partnership never having traded).  The failure to submit the returns and the under payment as a result of paying on the assessments were the subjects of particulars (i), (iii) and (iv) of the particulars of count 2.
16.	One return was submitted.  It was in respect of the quarter 1 June 1996-31 August 1996.  Again, the return was made under registration number 651.  Again, it was intended to relate to the trading of Sports Network Europe (the second partnership).  On the jury’s verdict, it understated the amount of VAT due.
17.	The use of the first partnership’s registration in respect of the business of the second partnership did not stop there.  The second partnership invoiced its own suppliers under registration 651. (Appeal bundle page 9).
18.	In short, to all intents and purposes, the first partnership’s VAT registration was used for the business of the second.
19.	Subsequently, the Customs and Excise investigated the position.  On 3 February 1998, Mr. Morling, the National Investigation Service of the Customs and Excise wrote to “The Partners, Sports Network (Europe)” stating, among other things, that 
“From information available to HM Customs and Excise, it appears the above partnership is incorrectly registered…The partnership details received by Customs and Excise on 26 April 1995…show the partners as Don King Productions and Sports Network (Europe) Limited .... A partnership agreement dated 1st March 1996 in the possession of the Customs and Excise shows that with effect from that date a wholly new partnership was created between Christopher … Roberts and Frank … Warren … In order to rectify this situation I enclose form VAT 1 and VAT 2 which should be completed with details of the ‘new’ partnership.  Once I have received the forms I will arrange the partnership of … Warren and … Roberts trading as Sports Network (Europe) (sic) to be registered from the date the partnership commenced trading.  You will then be issue with a new VAT registration number and certificate …” (Appeal bundle page 17).
20.	In 1998, the second partnership was registered under number 700.  The “effective date” of registration was said to be 1 March 1996, with returns being requested from that date to 31 May 1998.  In other words, the registration was backdated to the beginning of the second partnership.  A long return as from 1 March 1996 was requested regarding it.  A request was later made for the registration of the first partnership (on number 651) to be de-registered.
The submissions made at the close of the prosecution case at trial
21.	It was submitted by Miss Poulet QC on behalf of Mr. Roberts that as laid Count 2 was defective.  Mr. Pugh, who had been junior counsel below and represented the appellant before us, effectively repeated those submissions.  The argument was as follows.
22.	There were two separate registered entities.  The first was Sports Network (Europe).  That was the partnership of Sports Network (Europe) Limited and Don King registered under number 651.  The second was Sports Network Europe, the partnership of the defendants retrospectively registered under number 700.  The assessments relied upon under Particulars (i), (iii) and (iv) were made in respect of the first partnership.  The return relied upon under Particular (ii) was also in respect of that partnership.  Yet the prosecution allegations were not based on that partnership’s trading.  They could not be.  It had never traded.  No VAT was due from it.  The prosecution was in respect of the second partnership’s trading.  However, at the time relied upon in the indictment, that partnership was not registered.  There was no legal requirement for it to account for VAT until it was.  That only happened in 1998.  The particulars were therefore alleging dishonesty regarding quarterly payments not then due.  While it may be the prosecution could have charged an offence concerning the failure to register, if done to evade VAT, it did not.  The counts charged were defective in law.  To the judge it was submitted the count should be withdrawn.  To us it was submitted the convictions based upon it could not stand.
23.	No point was taken by Mr. Pugh regarding the reference to Sports Network (Europe) (as opposed to Sports Network Europe) in Count 2.
24.	The judge ruled against the defence on three bases.  First, he found that there was evidence that the Customs and Excise knew of the change in the partnership at the time of the assessments and the submission of the return.  The assessments were therefore made in respect of the second partnership.  Similarly, the return was made in respect of it.  There was no error.
25.	Mr. Suckling QC, on behalf of the Respondents, accepts that the evidence did not justify the judge reaching that conclusion.  He does not seek to support that ruling.  We therefore consider it no further.
26.	Second, the judge found that in any event, there was no need for the new partnership to register.  It was effectively the continuation of the original partnership.  Section 45(1) applied.  The assessments were therefore directed correctly.  Similarly, the return was correctly submitted.  Again, there was no error.
27.	Mr. Suckling did not appear to pursue that argument vigorously before us.  In our view, he was right not to.  While each situation must depend upon its own facts, we cannot accept the second was simply a continuation of the first partnership.  There were two separate and distinct partnerships.  The partners of the first were a limited company and an American individual.  The partners of the second were two different individuals.  The business objects of the two partnerships were different.  The first was the promotion of boxing tournaments involving Don King.  The second was effectively the continuation of the business which had been Sports Network Limited.  There should have been a fresh registration of the second partnership.  It was not a continuation of the first.
28.	Third, the judge found that it did not matter anyway.  At worst, this was simply an honest and genuine mistake. If it was, it was the trader’s (that is to say, the appellant’s) fault.  It did not affect his duty accurately to account for VAT or to put in proper returns.   It was no more than a technicality and did not render the count defective.  In the context of the case “... it simply doesn’t matter.”(Transcript, volume 2, page 8A).
29.	We agree.  In our view the error regarding registration (which we accept there was) is immaterial to the allegations in count 2.  Our reasoning is as follows.
30.	First, there was a duty to account for VAT for the trading of the second partnership.
31.	Second, the Customs and Excise issued the VAT assessments under registration 651 in respect of the trading of a business.  The appellant paid those assessments and submitted the return in respect of the trading of a business.  That business was the second partnership.  In paying the assessments or submitting the return under 651, the appellant was effectively inviting the Customs and Excise to treat the assessments and the return under 651 as relating to the business of the second partnership.  That is what he intended. That is what he knew the Customs and Excise was in effect doing.
32.	Third, he adopted registration 651 for the second partnership not only in his dealings with the Customs and Excise.  He did so too with his own suppliers.  Indeed, if Mr. Pugh’s submissions are right, he was wrongfully claiming VAT from them under registration 651.  They would have an argument to reclaim it.
33.	Fourth, when accounting for the second partnerships’ business under registration 651 in that way, the appellant was required to do so in accordance with the Act.  He was required to submit the returns during the accounting periods as set out in the particulars.
34.	In short, the appellant was to all intents and purposes using registration 651 for the second partnership.  He knew when doing so, he was required to act in accordance with the provisions of the Act.  His failure to do so was the substance of count 2.  The fact that subsequently there was a retrospective registration of the second partnership is immaterial.  The crucial period is when the assessments were paid and the return submitted.
35.	In short, we can see nothing wrong with the count or particulars as laid.  The conviction is not in any way unsafe.
The second ground of appeal
36.	There is a second ground of appeal.  It relates solely to the assessment allegations (particulars (i), (iii) and (iv)).
37.	When directing the jury on the assessment allegations, the judge said this.
“The prosecution’s case in relation to this alleged evasion is that it took one of two forms … Either a deliberate and dishonest submission of false returns or a deliberate and dishonest failure to submit returns … In the latter case … this led [to] the Customs and Excise issuing assessments on VAT, but these assessments were far below the true liability, which, says the prosecution, was the object of the exercise …”(Trancript, volume 4, page 5B).
38.	He later said of particular (i):
“not submitting a VAT return for the period, that is the first allegation; thereafter only paying the assessment made.  That is the second allegation.” (Transcript volume 4, page 26A)
39.	There were written directions for the jury.  The judge went through them.  As to the assessment allegations, the direction said this.
“Considering the case of each defendant … in relation to one or more of the VAT periods … as represented by the particulars … has the prosecution made you sure … of these two things:
a)	That he was party to it … and;
b)	The non submission of the return was deliberate and dishonest on his part … being with the intent to deceive the … Customs … by knowingly concealing from them the true VAT figure … for the relevant period, in the belief that the partnership would not have to account for all the VAT due at that time.…” (Transcript volume 4, page 28E)
40.	Of course, the count also alleged that the appellant knew that the assessment was for a lower amount than that due.  He knew that when he paid on that assessment.  The defence case was that the appellant did not know the amount of VAT due and that therefore less was being paid than should have been.  Given that was the defence case, submits Mr. Pugh, the written directions should have referred to that aspect.  The jury should have been given an opportunity to consider it.
41.	We disagree.  This was a clear and correct direction.  The particulars of the count itself set out the ingredients which needed to be proved.  The direction underlined that the jury could only convict if it was sure there was deliberate dishonesty in the non-submission of the return at the outset.  It is not conceivable, moreover, that the jury could have concluded that the appellant deliberately and dishonestly did not submit returns with intent to deceive the Customs and Excise and avoid payment of VAT, but may not have known the assessments were less than the amount due.
42.	For the reasons set out, this appeal against conviction is dismissed.