Henderson (t/a John Clark (Granite specialists)) v Customs and Excise [2003] UKVAT V18203 (27 June 2003)

Default surcharge – minor delay – shortage of funds – no particular bad debt.  Appeal refused.

EDINBURGH TRIBUNAL CENTRE

	GEORGE ALFRED HENDERSON
	T/A JOHN CLARK (GRANITE SPECIALISTS)	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	       Respondents

			Tribunal:	 (Chairman)   T Gordon Coutts, QC

Sitting in Aberdeen on Thursday 26 June 2003

for the Appellant		Mr G Henderson

for the Respondents	Mr A McCue

© CROWN COPYRIGHT 2003.

DECISION

Mr Henderson who appeared in person explained to the Tribunal that the reason that his payments were admittedly only a matter of a few days late for the relevant accounting period 09/02, and also earlier periods, was that he was struggling to establish a business.  His first years trading was disappointing and a profit of £7000 was all that he achieved.  He had consistently fallen in arrears with his payments because he did not have the money and could not get it from his bank.

He had been invited by the Commissioners to indicate whether there were any special unforeseen circumstances which could account for his failure to make payment in time but was unable to point to anything other than what would appear to be a shortage of working capital.  His plea was basically one for mercy.

Unfortunately his situation falls squarely within the statutory provision whereby shortage of funds is not a reasonable excuse for delay in payment the Value Added Tax Act 1994 section 71(1) a) “an insufficiency of funds to pay any VAT due is not a reasonable excuse”.

The Appellant was a straightforward trader in a small way trying to maintain a business.  The Tribunal unfortunately cannot take account of any particular circumstance standing the statutory prohibition above.  They urged upon the Appellant to take steps to get out of this Default Surcharge cycle he has got into and consider a cash accounting scheme.  However so far as the present appeal is concerned it must be refused.

T GORDON COUTTS, QC

CHAIRMAN

RELEASE:  27 JUNE 2003 

EDN/03/04