18995 
VAT – PENALTIES  —  Default Surcharge  —  VAT return form not received by taxpayer or alternatively mislaid  —  delay in submitting form and paying tax said to have been occasioned by use of replacement form  —  delay not attributable to use of replacement form  — no reasonable excuse for lateness  —  appeal dismissed 

MANCHESTER TRIBUNAL CENTRE

  	
	BAMBU LTD	Appellant

	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

				Tribunal: Michael Johnson	 (Chairman)

Sitting in public in Manchester on 1 March 2005

David Russell, financial consultant, for the Appellant

Christopher Owen, of the Solicitor’s office of HM Customs and Excise, for the Respondents

	© CROWN COPYRIGHT 2005

DECISION
1.	This is an appeal against a default surcharge of £274.48, imposed by the Commissioners of Customs and Excise (“Customs”) in respect of the Appellant’s VAT accounting period 05/04.  The surcharge arose because the submission of the Appellant’s VAT return for that period and payment of the tax due took place 14 days after the due date.
2.	Mr Russell, who represented the Appellant, is a partner in D & E Financial Services.  He told the tribunal that he had responsibility for the completion and submission of the Appellant’s VAT returns.  He said that the two ladies who direct the Appellant had little time for or comprehension of value added tax affairs, and would rely upon him in that regard.  He said that he was accustomed to drop in to see them on a weekly basis, and that when the completion and submission of a VAT return was required, he would attend to this on their behalf.
3.	In respect of the 05/04 quarter, Mr Russell told me, the directors had either never received a VAT return from Customs or this had been mislaid.  The fact that they did not have the return form to hand meant that the directors were not astute with regard to making a tax return for that quarter.  However Mr Russell was not fazed by the lack of a return form; rather he completed a blank form VAT 100 that he happened to have, inserting all the necessary details for the Appellant, and this was sent to Customs, together with the tax due.
4.	The due date for the return was 30 June 2004.  The return and the tax were received by Customs on 14 July 2004.  Mr Russell contends that a reasonable excuse exists for the late submission, namely that the usual printed form VAT 100 provided by Customs to taxpayers was not available to the Appellant in this instance, and that this gave rise to the delay.
5.	However I find that Mr Russell knew, or ought to have known, that a VAT return was due in respect of the 05/04 quarter, and should be submitted by 30 June.  The directors of the Appellant may not have appreciated the importance of making a return, quite apart from whether or not a return form was to hand, but Mr Russell must have known, because the making of VAT returns was one of the functions he regularly performed for the Appellant.
6.	Moreover Mr Russell was himself sufficiently astute to provide a substitute form when the directors did not hand him one.  I find that he would have done this, at whatever date he was instructed to attend to VAT, if a return form was not to hand.  Mr Russell is clearly an able and resourceful person, and well aware of the need to comply with VAT accounting requirements.
7.	It therefore seems to me that the non-availability of the printed form is neither here nor there in this case.  The delay in sending in the form and paying the tax in respect of the 05/04 quarter was a function not of the non-availability of the printed form, but rather of the late date at which the information to complete the substitute form was assembled and processed by Mr Russell.
8.	This lateness may be down to the directors, to Mr Russell, or both.  It was, however, the responsibility of the Appellant to attend to its VAT, quarter by quarter, and to be aware that an accounting date was approaching.   On the facts of the case, that responsibility had been provided for by the weekly visits of Mr Russell to the business.  It is not clear to this tribunal that the responsibility was adequately discharged in this case.
9.	It is moreover a feature of this case that for the previous three quarters the Appellant had also been a number of days late with its VAT returns.  This is suggestive that, notwithstanding the weekly visits of Mr Russell, the Appellant had not in any case put in place a regime enabling compliance with the due dates for VAT accounting.
10.	For the above reasons it is my view that the lack of a printed form was beside the point in this case, and that a reasonable excuse for the late submission and payment has not been made out.  The appeal is therefore dismissed.

MICHAEL JOHNSON
CHAIRMAN
RELEASE DATE: 22 March 2005

MAN/2004/0760