18838

ASSESSMENT –confectioner, tobacconist and newsagents – average mark up –2.35% agreed at 13% - First accountant bankrupt – Appellant unable to deduce appropriate evidence – second accountants figures agreed - assessment to best judgement – case dismissed

MANCHESTER TRIBUNAL CENTRE

	STUART AND CHRISTINE MADDEN	Appellants
Trading as Maddison Stores

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	

Respondent

				Tribunal:	DAVID S PORTER  (Chairman)
						GILLIAN PRATT  (Member)
						
Sitting in public in Manchester on 20 September 2004

David P Phillips Accountant appearing for the Appellant 

John Cannon of counsel instructed by the solicitors for Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2004

DECISION

1.	By a Notice of Appeal dated the 13 November 2002 Mr Phillips Accountant to Stuart and Christine Madden (the Appellants) appealed against the assessment in the sum of £11,046 representing VAT arrears, which had been reduced to £5205 by agreement with the Respondents by the time of the hearing. Mr Phillips on behalf of the Appellants contended that the business had operated in a very small way and had been closed down. It was not therefore realistic for the Appellants to have to pay any VAT. The Respondents are of the opinion that they had considered all the matters in dispute and that the resultant assessment was to best judgement. 
2.	The Parties
Mr J Cannon of counsel appeared for the Respondents and produced a bundle of copy documents and brought Mr M Downer and Mrs H Gibbs to give evidence on behalf of the Respondents. Mr Phillips appeared for the Appellants and called Mr Stuart Madden as a witness.
3          The Facts
The Appellant carried on business as a confectioners, tobacconists and newsagents trading as Maddison Stores from premises at 137 Lovely Lane Warrington WA5 1UB and was registered for VAT from 1 March 1987. The business was visited by Mr Downer on 22 June 1998 as a result of twelve successive requests for repayments. Mr Downer took an agreed representative quarter’s sample of takings for the period 07/97. From these details he arrived at a full weighted mark up of 20.33 per cent (rounded down to 20 per cent). On the basis of these figures he calculated arrears of VAT amounting to £11,046. (The calculations appear at pages 8 to 21 and page 81 of the bundle). The calculations were sent to the Appellants in a letter dated 15th July 1998. They passed the letter on to their first accountant Carty McNevin & Co. 
3.	Carty McNevin & Co wrote to the Respondents indicating that the liability was no more than £1401.48 and advised the Appellants to pay that amount which they did.
4.	Mr Phillips was subsequently appointed accountant for the Appellants and had extensive correspondence with the Respondents having provided the Tribunal and the Respondents with substantial calculations to demonstrate that the assessment raised by the Respondents was excessive. As a direct result of those submissions the VAT was reduced to £5205.
5.	It was clear at the hearing that Mr Phillips had agreed the amounts with the Respondents and the Appellants were unable to produce any further evidence not least because much of the original details had been lost when the first accountant went bankrupt
6.	We find as fact the matters set out in paragraphs 3 to 6 above.
Summing up
7.	Mr Cannon submitted that as the figures had all been agreed in correspondence that had been no need for there to be the hearing to-day.  It was clear that the figures had not only been prepared to best judgement but had been agreed by Mr Phillips. In the circumstances the case should be dismissed and he asked for costs of £650.
8.	Mr Phillips agreed after a short adjournment that there was nothing more to add to the agreement that had been reached in correspondence and that in the circumstances the Appellant would have to agree the revised assessment of £5204. 
The decision
9.	My Colleague and I have considered the facts in this appeal and confirm that the assessments have been made to best judgement and that the case is dismissed. We also award costs of £650 as requested by Mr Cannon.

D S PORTER
CHAIRMAN
Release Date: 11 November 2004

MAN/2003/0031