[2009] UKFTT 103 (TC)

TC00071

Appeal number LON/2008/2119

Value Added Tax - Default Surcharge - Late filing of return resulting in part from various changes of address and the failure to receive the Return Form - Inadequate advice given to the trader by his regular contact in the Debt management section of HMRC - Appeal allowed

FIRST-TIER TRIBUNAL

TAX

JAMES JEFFERY T/A JEFFERY-RYDEAppellant

- and -

THE COMMISSIONERS FOR HER MAJESTY’S
REVENUE AND CUSTOMS (Value Added Tax)Respondents

TRIBUNAL: HOWARD M NOWLAN (Judge)

LYNNETH SALISBURY

Sitting in public in London on 18 February 2009

The Appellant in person

Simon Chambers of the Solicitor’s Office of HM Revenue and Customs, for the Respondents

© CROWN COPYRIGHT 2009

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DECISION

1. This decision simply confirms the decision that we gave orally, allowing the Appeal, and it largely repeats the reasons that we gave at the hearing.

2. The Appellant is an electrician who has had a very bad payment record with his VAT payments, and, to his very considerable cost, he had suffered 18 defaults since 2001. Most had cost him in the region of £500 and some £1000. He acknowledged before us that he had never complained about any of the earlier defaults because they were always “his fault”.

3. The default surcharge in relation to which he appealed to us was for the period 05/08, and the charge (at the 15% rate) £1304.80. The reason why he appealed to us was that he considered that this one was not his fault.

4. He claimed before us, and this sounded to be very credible, that by mid-June 2008, he had prepared the figures for submission in his VAT return that was due to be filed by 30 June. He had not however received the VAT Return, and thus on 23 June (according to the log of the phone call made by the officer in the Debt Management section of HMRC to whom he spoke) he rang up the lady with whom, as a serial defaulter, he had regrettably had much contact, and asked for the form. She undertook to send it to him. He never received the form, almost certainly because, having parted from his wife almost exactly 12 months before June 2008, he had lived temporarily in three different houses after leaving the matrimonial home. He had always made arrangements for his post to be forwarded, and had not notified HMRC of his changes of address, since he knew that two of the intermediate addresses were only temporary. In fact he did notify his change of address shortly after the various contacts relevant to the Return for 05/08. By 30 June, he had still not received the original Return, or the one promised on 23 June.

5. On 30 June, he again telephoned his contact in the Debt Management section, and her note of the phone call reads as follows:

“30.06.08. Telephone call from trader. He hasn’t received the 02/08 and 05/08 duplicates. I have sent these to a different address. I have advised him to try and do his 05/08 return online in order to avoid a surcharge”

6. The trader then gathered from a friend that if he drove over to a particular VAT office, he would be able to obtain a Return form there. This he did on 30 June. He then sent in the Return and a cheque, and the cheque was only recorded as having been received on 9 July.

7. The fundamental reason why we allowed this appeal, was that we considered that when he spoke on 30 June to his familiar contact in the Debt Management section of HMRC, the relevant official did not give him the correct and constructive information that she should have given to him. HMRC make much of the fact that, with traders who have difficulties in paying their VAT, they will be as cooperative as possible. In this case, the relevant information that should have been given to the trader was that it would have been very difficult to file on line, partially because the trader did not have, or seemingly know how to operate, a computer, and also because we understand that various required codes to facilitate on-line filing would be unlikely to have been obtained in time to file on line. In any event, the relevant advice for him to be given was that if he paid electronically (either by BACS transfer initiated before, say, Wednesday 2 July (to arrive by Monday 7 July), or by CHAPS transfer initiated before mid-day or 2.00 p.m. on Monday 7 July, the payment would have been duly received in time, and the delay in the filing of the Return would have occasioned no penalty.

8. As it was, the Appellant was left in the position of driving over, somewhat pointlessly, to obtain a VAT form from a nearby VAT office, and he remained under the impression that he could not pay without filing the Return, because understandably the payment would go adrift unless attached to the Return.

9. We accept that HMRC maintain the proposition that callers to the VAT Helplines must ask the right questions to obtain the correct answers. We also accept that people staffing the Helplines are generally furnished with text answers to common questions, and that it is too much to expect the people staffing the Helplines to give constructive and intelligent and helpful advice. We consider, however, that the Appellant was let down in this case in the phone enquiries that he made with his contact in the Debt Management section, and we consider that it was HMRC that fell short in maintaining their standard of trying to assist those having trouble with their filings. We have not based our decision on the fact that the Appellant had also been ill, that he had separated from his wife a year ago, and that he had been juggling with different addresses, and we certainly blame neither HMRC nor the Appellant for the fact that his endeavours to see that all his post was still received by him in a difficult situation seemingly failed. All of those factors do somewhat increase our sympathy for the Appellant. We base our decision, however, simply on the fact that had he been given the right advice and instruction by someone who must have been versed in all the intricacies as to how he could avoid a default and a surcharge, he would indeed have paid on time electronically.

10. We might finally observe, to minimise any embarrassment that there might be between the Appellant and the lady to whom he spoke in the Debt Management section of HMRC (with whom he may regrettably have to have continuing contact) that the basis of our decision was not one that the Appellant himself had raised at all, but one that it struck us that, in fairness, we should take on his behalf.

11. We accordingly allow the appeal.

HOWARD M NOWLAN
TRIBUNAL JUDGE
RELEASE DATE: 18 May 2009

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