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background
background
I was not provided with any written evidence, nor did I hear any oral evidence from either party. Consequently, the following finding of facts are made from the documents provided in the hearing bundle.
The Company’s effective date of VAT registration was 20 November 2019. The Company’s business activity was described as:
…trading and recycling metals plastics and other materials.
Both the Company and the Appellant corresponded with HMRC, predominantly during 2020 and 2022, about numerous issues to do with the Company’s VAT registration, supply chains, VAT returns and the Company’s entitlement to deduct input tax. For present purposes the relevant facts are:
The Company was de-registered for VAT from 30 March 2021
On 10 September 2021 HMRC wrote to the Company issuing a VAT assessment of £176,489 for the period 07/20 and £254,159 (later amended to £249,532) for the period 10/20 (the ‘Company Assessment’).
On 20 September 2021 HMRC wrote to the Company issuing the Company Penalty. The amount of the Company Penalty is £127,806.30.
HMRC wrote to the Company on 25 October 2021, explaining that it had sent notice of a penalty to the Appellant pursuant to s69D. On 26 January 2022 HMRC also wrote to the Appellant’s home address enclosing a ‘Company officer liability decision notice’, setting out that the Appellant was being issued with a penalty equal to the Company Penalty (£127,806.30) pursuant to s69D. The hearing bundle did not contain any letter dated 25 October 2021 to the Appellant at his home address, and HMRC did not explain why the 26 January 2022 letter had also been sent. Based on the information before me I consider that the 26 January 2022 letter to the Appellant is the notification of the s69D penalty (that is why above I have defined this letter as the Director Penalty).
Following a request from the Company dated 13 December 2021, on 14 February 2022 the Company Review upheld: the deregistration of the Company; the Company Assessment and the Company Penalty.
On 7 March 2022 the Director Penalty Review upheld the Director Penalty. The Director Penalty Review says that it was undertaken in response to an email dated 1 February 2022 from the Appellant (a copy of that email was not in the bundle either). However, there was nothing before me nor did either party suggest that the request for the statutory review of the Director Penalty was late.
The Director Penalty review was sent to the Appellant’s home address. The Director Penalty Review relevantly provides:
If you do not agree with my conclusion you can ask an Independent tribunal to decide the matter.
The statutory appeal period is 30 days from the date of this letter.
You can find out how to do this on the tribunals service website https://www.gov.uk/tax-trlbunal/appea/-tcrtribunal or you can telephone them on 0300 123 1024 (8:30am - 5:00pm).
If you choose to appeal to HM Courts and Tribunal Service, you will need to attach a copy of this letter with your appeal. If you do not, then they may reject your appeal. You can find further information about appeals and reviews on the GOV.UK website at https://www.gov.uk/tax-appeals.
You can apply for Alternative Dispute Resolution, or ADR. ADR may help to clarify the issues and resolve the dispute without the need for further litigation. You would need to make an application for ADR, which should include any further information that you do not think has been taken into account so far, and this would be considered by a panel who would decide whether this approach Is appropriate in your case.
I enclose HM RC's factsheet FS21 which tells you about this process and you can find further details online at: https://www.gov.uk/guidance/tax-disputes-alternatlve-dispute-resolution-adr Including how to apply for ADR.
Your statutory appeal rights are not affected by an application for ADR; however, if you do decide to apply you must still notify your appeal to the tribunal within the time limit mentioned above. This is essential to ensure that your appeal remains open. When notifying your appeal to the tribunal, you should tell them that you have applied to HMRC for ADR.
HMRC’s ADR team wrote to the Company on 31 May 2023, that letter:
Refers to an application for ADR dated 4 May 2023 (this application was not included in the hearing bundle).
Explains that ADR could not proceed as there had not been an appeal made to the Tribunal.
The Notice of Appeal is dated 11 September 2023, it sets out the reasons why the appeal was late as follows:
I used NXG accountants and I was certain that they applied to the first tier tax tier tribunal [sic] and they applied for an alternate dispute resolution.
Sometime had passed then I used H Accountancy as I had no response. They also applied for an ADR under the assumption an application had been sent to the first tier tax tribunal.
On phoning HMRC on the 25th August 2023 I realised an application had not been received.
I am resubmitting the application I believe it is late however I believe I have a 100% success rate in challenging the section69C and section 69D penalties.
I truly hope the judge allows this application to be successful as I worked on a monthly basis with HMRC who guided me every step of the way only to disallow my input VAT and have been very unfair with me.
11 September 2023 is 523 days after 6 April 2022 which was the time limit for appealing the Director Penalty Review.
HMRC’S notice of objection explains that there is no record of the phone call of 25 August 2023 but does not dispute that it occurred.
None of the correspondence in the hearing bundle (including the Notice of Appeal) is from NXG Accountants (‘NXG’) or H Accountancy Ltd (‘H Accountancy’).
Mr Shepheard confirmed the Appellant’s home address during the hearing.