19029
LONDON TRIBUNAL CENTRE				Reference No: LON/2002/1088
										LON/2002/817
			
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								Appellant/Applicant 

								Respondents

                                                             MAD (SFW) LTD	                                   Appellant
	
	- and -

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

	Tribunal: MICHAEL TILDESLEY  (Chairman)
                                                     CHRIS PERRY C.ENG MICE

	Sitting in public in Plymouth on 25 February 2005

	DIRECTION

THIS APPEAL against a decision of the Respondents with respect to a Default Surcharge being a reasonable excuse appeal as defined by rule 2 of the Value Added Tax Tribunals Rules 1986 as amended coming on for hearing this day

AND UPON HEARING Phillip Webb, Advocate for Customs and Excise, for the Respondents 

AND THIS TRIBUNAL having heard this appeal under Rule 26(2) and having announced its decision the Appellant may apply for the decision to be set aside provided application is made within 14 days of the date of release of this decision

AND THE parties present at the hearing by their said representative stating pursuant to Rule 30(8) of the Value Added Tax Tribunals Rules 1986 as amended that they do not require the said decision to be recorded in a written document in accordance with Rule 30(1) of the said Rules

THIS TRIBUNAL FINDS THAT the Appellant has failed to prove on the balance of probabilities that there was a reasonable excuse for not submitting the VAT returns and payments on time for the periods 05/02, 08/02
	
AND THIS TRIBUNAL DIRECTS THAT this appeal is DISMISSED

AND that there is no direction as to costs

REASONS FOR THE DECISION:

The Appellant submitted that cashflow difficulties and the failure of the Respondents to respond to correspondence amounted to a reasonable excuse.

The Tribunal was not satisfied that the Appellant’s submissions amounted to a reasonable excuse because:

            (1)	Insufficiency of funds in itself does not amount to a reasonable excuse.

            (2)	The cashflow difficulties experienced by the Appellant Company were predictable and characteristic of the particular business, and should have been planned for.

            (3)	It is regrettable that Customs and Excise did not respond directly to the Appellant’s letter of 27 March 2002 where the Director advised of potential difficulties with the May 2002 return and payment.  However, we note that Customs and Excise have in the past been responsive to the Appellant’s situation by granting 5 time to pay agreements.  Further the Appellant was well aware from the documentation that a time to pay agreement does not avoid the imposition of a default surcharge.  In the circumstances we do not consider that the isolated failure to respond on 27 March amounted to a reasonable excuse.

MICHAEL TILDESLEY
Chairman
Release Date: 8 April 2005