20393
Default Surcharge: Extension Notices: Extension of Default Surcharge regime; repayment trader; failure to make returns timeously; return and payments late where no payment due: Appeal Dismissed.
EDINBURGH TRIBUNAL CENTRE
GAVIN REDFORD – T/A PREMIER KITCHENSAppellant
- and -
THE COMMISSIONERS FOR
HER MAJESTY’S REVENUE & CUSTOMS Respondents
Tribunal: (Chairman): Mrs G Pritchard, BL., MBA., WS
Sitting in Edinburgh on Tuesday 25 September 2007
for the AppellantMr Gavin Redford
for the RespondentsMr Russell Harrison
© CROWN COPYRIGHT 2007.
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DECISION
This is an appeal against the imposition of a Default Surcharge in respect of the quarter 01/07 having a due date of payment of 28.02.07 amounting to £773.86 levied at 15%.
Mr Redford appeared and represented himself. Mr Harrison appeared for HMRC.
The main argument tendered by Mr Redford was that he had entered the Default Surcharge regime in September 2004. He believed he was clear of that regime by September 2005 as he had received no extension notices as claimed by HMRC.
He was usually a repayment trader as the bulk of his kitchen installations were in new-build homes. Only when he was not fully engaged with that did he do individual kitchens, thereby creating a liability.
He accepted his returns were often late. When they were repayment returns that was of benefit to HMRC.
The returns which extended the Default Surcharge regime occurred in 01/05 and 04/05 when repayment claims were late. These did not incur penalties but they had extended the regime. He claimed he was unaware of the extensions as he had not received extension notices. The Appellant was aware of the liability to surcharge in the quarter 04/06 and had protested at its application on the same grounds and been offered firstly an internal review by HMRC. Before any review proceedings or an appeal was instigated HMRC simply deducted that surcharge from the Appellant’s next VAT payment due from that return. He left the matter there. However when the 01/07 quarter payment was also subject to a surcharge he finally decided to appeal.
For HMRC Mr Harrison explained that Mr Redford simply was not making VAT returns as required and was paying the penalty. He produced the schedule held by HMRC showing the payments to and from the Appellant, and showing the SLNE (Surcharge Liability Notice Extension) intimations being sent because of late returns.
Decision
The appeal is dismissed. No expenses are due to or by either party.
Reasons
The VAT returns and payments or repayment claims must be made timeously. Once a taxpayer enters the Default Surcharge regime he must take particular care to be timeous on every occasion with every return and payment or claim otherwise the extension applies. It is a legal requirement for HMRC to send the notice extension. The law is clear in S59 Value Added Tax Act 1994. Although I had some sympathy with the Appellant because of his acceptance of the deduction of the 04/06 surcharge, that was the point at which his evidence might have had more credibility.
MRS G PRITCHARD, BL., MBA., WS
CHAIRMAN
RELEASE: 11 OCTOBER 2007
EDN/07/78
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