20240
VAT DEFAULT SURCHARGE — appellant did not appear — payment received late — no evidence to support the Appellant’s assertion that payment and return were made by due date — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

 
 	
					INDUSTRIAL BULK CONTAINERS LIMITED	Appellant

- and -

THE COMMISSIONERS FOR
				HER MAJESTY’S REVENUE AND CUSTOMS	Respondents

Tribunal: Michael Tildesley OBE (Chairman)

Sitting in public in Manchester on 9 July 2007

The Appellant did not appear and was not represented
 
Kim Tilling of the Solicitor’s Office for HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2007

DECISION

The Appeal
1.	The Appellant was appealing against the imposition of a default surcharge in the sum of £493.56 for the period 1 October 2006 to 31 December 2006.
2.	The Appellant set out its reasons for appealing in a letter dated 9 March 2007 and signed by Judith Kelly, manager. The relevant parts of which were as follows:
“We sent the VAT return and payment on 31 January 2007, first class post. On 13 February we noted that the monies had not been taken from our account and I rang HM Revenue and Customs helpline and spoke to Julia. Julia said that the cheque had not been received and that she would send another return for me to complete and resend. On 14 February the monies were taken from our account. Therefore the cheque must have been received prior to my telephone conversation with Julia. Now we have received charges for late payment.
I spoke to Joanne this morning asking that the charges be removed and she said that payment had to be received by 31 January and therefore the charge stands. I have looked back over the last payments made for VAT, and we have always sent it on the last day of the month following i.e. return ending September, cheque sent 31 October 2006. We have not had any charges despite the payment not being received by the last day of the month. We do not have any control over the postal system and cannot be accountable for their inefficiency.  For future returns we will send by special delivery”.
The Hearing
3.	The Appellant did not appear. The hearing notice had been sent to the correct address. I granted the Respondents’ application to proceed in the absence of the Appellant in accordance with rule 26 of the Tribunal Rules 1986.
4.	A bundle of documents was supplied by the Respondents.
The Facts
5.	On 31 January 2007 the Appellant posted the VAT return and payment for the quarter ending 31 December 2006. The Respondents received the return on 12 February 2007 as evidenced by the date stamp. 
6.	On 28 February 2007 the Respondents issued a surcharge assessment in the sum of £493.56, which represented two per cent of the VAT due for the quarter ending 31 December 2006. The Appellant had one previous default when it failed to send the June 2006 return and payment on time. 
Decision
7.	I am satisfied that the Appellant’s VAT return and payment for the period ending 31 December 2006 was received by the Respondents after the due date of 31 January 2007.
8.	Regulation 25 of the VAT Regulations 1995 required the Appellant to submit its VAT returns and payments in time to ensure that they were received by the Respondents no later than the last day of the month next following the end of the VAT period in question. Thus the Appellant’s return for the quarter ending 31 December 2006 should have been received by the Respondents no later than the 31 January 2007, if it wished to avoid a default surcharge.
9.	The Appellant is not liable for a default surcharge if it can establish on the balance of probabilities that the return with payment was despatched at such time and in such a manner that it was reasonable to expect that it would have been received by the Respondents by the due date.
10.	The Appellant stated that it sent its return and payment on 31 January 2007 by first class post. The earliest date that the return would have been received by the Respondents was 1 February 2007 which was after the due date. The Appellant by its own statement acknowledged that it was late with the return. The fact that the Appellant has previously escaped penalties by sending the return on the last day of the month following the quarter was of no relevance and a slice of good fortune for the Appellant.  
11.	I find that the Appellant was in default for the period ending 31 December 2006 and liable to pay a surcharge of two per cent of the VAT due for that period. I, therefore, dismiss the Appeal and uphold the default surcharge in the sum of £493.56  issued on 28 February 2007.
12.	I make no order for costs.

                                 MICHAEL TILDESLEY OBE
CHAIRMAN
Release Date: 11 July 2007

MAN/07/0442