McFarlane v Customs and Excise [2004] UKVAT V18597 (04 May 2004)


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United Kingdom VAT & Duties Tribunals Decisions
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URL: http://www.bailii.org/uk/cases/UKVAT/2004/V18597.html
Cite as: [2004] UKVAT V18597

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McFarlane v Customs and Excise [2004] UK V18597 (04 May 2004)

    Default Surcharge: Appellant's enquiries after due date. No discretion invested in Debt Management officer. Appeal dismissed.

    EDINBURGH TRIBUNAL CENTRE

    GEORGE MCFARLANE Appellant

    - and -

    THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

    Tribunal: (Chairman): Mrs G Pritchard, BL., MBA., WS

    Sitting in Edinburgh on Tuesday 27 April 2004

    for the Appellant George McFarlane

    for the Respondents Mr A McCue

    © CROWN COPYRIGHT 2004.

     

    DECISION

    This is an appeal against a Default Surcharge imposed in respect of the quarter 07/03, levied at 10% and amounting to £1215,95. Mr McFarlane appeared on his own behalf. He gave evidence. The Commissioners were represented by Mr A McCue. Evidence was given by Mrs Ada Baird, one of their officers in the Debt Management Unit in Glasgow. Written evidence consisted of a bundle of papers submitted by the Commissioners numbered 1-49. Where reference is made to any page of the said bundle, it will be treated as repeated here.

    The grounds of appeal stated by the Appellant in the Trib 1 are "I was late with my VAT, I phoned the VAT office. I was told by Mrs Baird that I had 7 days after the due date to pay and there wouldn't be a charge. I appeared at the VAT office with my payment in full by cheque. I wasn't informed by anyone up to that point that payment would need to be by BACS to excuse the fine. I enclose a letter which I sent to the VAT office on 29/10/03".

    From the evidence given today I find the following facts:

  1. In respect of the 07/03 return due by the Appellant the return and payment had not been dispatched by him prior to 1 September 2003.

  2. He was already in a Default Surcharge regime, of which he was aware.

  3. He called the Debt Management Unit at Portcullis House in Glasgow advising them that he had not made his 07/03 return which was for £12,159.53 as he was unable to pay in full. He spoke with Mrs Ada Baird. She advised him that he would be liable for a 10% surcharge. She explained the surcharge problem. He advised her he had a cash flow system. She also explained the cash accounting method. She also explained electronic fund transfer and the BACS system of payment. The Appellant explained to her that he had gone onto a factoring system to try to improve his cash flow.

  4. Mrs Baird is not empowered to waive the default surcharge. She has no discretion on that at all.

  5. Mrs Baird advised the Appellant to send in his return with as much money as he could gather. She advised him that she would allow a 4 week time period for payment. The Appellant advised her that he would bring the money into Portcullis House. Mrs Baird made arrangements to send a letter and a booklet about cash accounting.

  6. On 5 September 2003 the Appellant went to Portcullis House and asked for Mrs Baird who was off sick. He took in the cheque for the return and the return itself. He was reminded that there would be a 10% Default Surcharge. The Appellant stated to the VAT officer that he believed he would not be subject to the 10% surcharge but was advised that this was incorrect.

    7. Submissions

    Mr McCue submitted that Mr McFarlane had been the person instigating the enquiries with the Debt Management Unit. The purpose of his call to that Unit was to arrange time to pay. He was aware that he had a problem and that he was out of time. He submitted that Mrs Baird was experienced and deals day in day out with persons in the Appellant's predicament. She has no discretion to waive a Default Surcharge. He asked the Tribunal to accept Mrs Baird's evidence as given.

    Mr McFarlane submitted that he had been advised by Mrs Baird that if he brought in his funds he would not be subject to the Default Surcharge. He submitted that he would have had no reason to call at Portcullis House with his cheque and given it to Mrs Baird unless she had so advised him. He claimed there would have been no reason for him to go to the trouble of raising sufficient funds to pay his Value Added Tax had he not believed this facility to be available.

    Decision

    The appeal is refused.

    Reasons for the Decision

    I found Mrs Baird a credible witness. The Appellant may very well have believed that the Default Surcharge was to be waived, only because Mrs Baird said that it was in order to bring the funds and the return into her if he so wished. However at best that could only be a misunderstanding. As Mrs Baird had no discretion to waive the Default Surcharge, she simply could not have given him that undertaking. She believed he should try to pay his VAT which was due but did suggest time to pay. Since she tried to alleviate some of his difficulties by recommending alternative methods of accounting or payment that is in my view a good indicator of her helpful attitude in difficult circumstances. She was entirely credible. Regrettably the Appellant was not.

    No expenses are awarded to or by either party.

    MRS G PRITCHARD, BL., MBA., WS
    CHAIRMAN

    RELEASE: 4 MAY 2004

    EDN/03/125

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URL: http://www.bailii.org/uk/cases/UKVAT/2004/V18597.html