Innzone Ltd v Revenue and Customs (VAT - PENALTIES : Default surcharge)

VAT � late submission of VAT return and payment of VAT due on return - whether reasonable excuse for late submission of return and payment due on return - No.

The Tribunal determined the appeal on 1 July 2016 without a hearing under the provisions of Rule 26 of the Tribunal Procedure (First-tier Tribunal)(Tax Chamber) Rules 2009 (default paper cases) having first read the undated Notice of Appeal received 14 March 2016 with attachments, and HMRC�s Statement of Case dated 14 April 2016 with attachments. The Tribunal wrote to the Appellant on 22 April 2016 indicating that if they wished to reply to HMRC�s Statement of Case they should do so within 30 days. No reply was received.

This considers an appeal against a default surcharge of �3,220.65 levied by HMRC for the late submission and payment by the due date of 7 January 2016 of the appellant�s VAT return for the period ended 30 November 2015.

The VAT Regulations 1995 Regulation 25(1) contains provisions for the making of returns and requiring them to be made not later than the last day of the month following the end of the period to which it relates. It also permits HMRC to vary that period, which they do in certain circumstances eg by allowing a further seven days for those paying electronically, and a further three days for those paying by means of a direct debit arrangement.

Section 59 of the VAT Act 1994 sets out the provisions whereby a Default Surcharge may be levied where HMRC have not received a VAT return for a prescribed accounting period by the due date, or have received the return but have not received by the due date the amount of VAT shown on the return as payable.