Eco- Hygiene Ltd v Revenue & Customs

VAT - default surcharge � appeal out of time � not opposed � appeal on the grounds of proportionality � whether Tribunal had jurisdiction to hear such appeals � yes � whether penalty disproportionate � no � appeal against surcharge dismissed

This is an appeal by Eco-Hygiene Ltd (�Eco�) against a penalty levied under the VAT default surcharge regime. The penalty falls into the 10% rate and was computed by HMRC at �1,712.52.

At the time the penalty was notified to Eco, it did not appeal under the usual �reasonable excuse� route. Nor does it seek to do so now. Instead, Eco is challenging the penalty using the proportionality argument that has featured in a number of Tribunal cases of late. HMRC both resist the company�s case and also say that this Tribunal� does not have jurisdiction to hear such an appeal. Additionally, the company is in strictness too late to appeal against the penalty so as a preliminary point it is seeking leave to appeal out of time. There are thus three issues before the Tribunal:

(2) If so, does the Tribunal have jurisdiction to hear an appeal based on proportionality grounds?

Eco�s case was presented by Mrs Sarah Kay of Wise & Co, the company�s advisers. Mr E G Harrap, the company�s managing director, gave evidence. HMRC�s case was presented by Miss S Whitley of HMRC�s Appeals and Reviews Unit.