Bulkliner Intermodal Ltd v HM Revenue and Customs
| Jurisdiction | UK Non-devolved |
| Judgment Date | 20 August 2010 |
| Neutral Citation | [2010] UKFTT 395 (TC) |
| Date | 20 August 2010 |
| Court | First Tier Tribunal (Tax Chamber) |
[2011] TC 00677
[2010] UKFTT 395 (TC)
Judge Roger Berner (Chairman)
David Massie, Director, for the Appellant
Simon Chambers, Advocate, HMRC, for the Respondents
Procedure - Costs - Whether commissioners acted unreasonably in defending or conducting the proceedings - The hearing concerned an application for costs by the appellant - The tribunal heard that the appellant had suffered a significant fraud in which its VAT registration number had been used illegally by the fraudster - The appellant had reported this to the commissioners but, following a later routine inspection, the commissioners had issued an assessment to recover amounts shown as VAT on the fraudulent invoices - The company had appealed and some months later the commissioners withdrew the assessment - The effect of the commissioners' actions had been disastrous for the appellant, resulting in it going out of business - The appellant claimed that the commissioners should pay the costs incurred by it in making the appeal, but the commissioners argued that they had not acted unreasonably - Held, that there was no individual act or acts of unreasonableness in the defending or conducting of the proceedings by the commissioners - They took the proper course of reviewing matters at policy level and applying for further time to obtain instructions - There was no undue delay on the commissioners' part in conducting the review and their decision to withdraw the assessment was taken and notified in a timely fashion - Expressing sympathy for the appellant, the tribunal rejected its application for costs - Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273), r. 10.
1. This is an application by the Appellant for costs of the appeal.
2. Mr Massie explained the background to me. He said that the appeal had to be considered in its context. The Appellant had suffered a very significant fraud, as a result of which it took injunctive action against the perpetrator in High Court proceedings. During those proceedings it became apparent that the fraudster had been illegally using the Appellant's VAT registration number. The Appellant advised the Respondents of this through a system known as "Customs Confidential".
3. Subsequently, the Appellant was due to have a routine VAT inspection. The Appellant contacted the Respondents in advance of this and drew their attention to the history and details of the fraud. However, Mr Massie said, when they arrived the HMRC officers were unprepared. They were unaware of the notification of the fraud, or even of the existence of "Customs Confidential". At the meeting the officers found nothing wrong, except that they proposed to assess for output VAT based on the fraudulent invoices. Mr Massie said that the officers chose to ignore the facts and went ahead and issued the assessments.
4. The Appellant asked for a review, but, Mr Massie claimed, this came to nothing because the Respondents would not listen to the arguments. The upshot was this appeal, which was made on 11 November 2009. The proceedings were then stayed pending acceptance of the Appellant's hardship application by the Respondents; this was accepted on 4 December 2009. On 6 January 2010 the appeal was assigned to the Standard category, transferred to the London tribunal centre, and the Respondents were given the usual 60 days to produce a statement of case.
5. On 8 March 2010, a little outside the 60-day period, the Respondents applied for an extension of time for the filing of the statement of case, to 22 March 2010. This was granted by the Tribunal on 16 March 2010, subject to any objection by the Appellant. The Appellant did object by letter of 23 March 2010, but in the meantime the Respondents had sought a further extension, this time to 29 March 2010. This extension was also granted by the Tribunal, subject to objection by the Appellant. On 29 March 2010 the Respondents made a further application for an extension, to 12 April 2010, but on 1 April 2010 the Respondents notified the Tribunal that they had withdrawn the assessment. On the Appellant's application, on 17 May 2010 the Tribunal allowed the appeal.
6. Mr Massie told me that the practical effect of all this was that the Appellant had been put out of business. Although he had been arranging financing for the company to enable it to recover following the fraud on it, the VAT assessment pending over the Appellant had caused this to fall apart. He argued that in these circumstances, although he recognised the constraints on the...
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...Catana and Revenue and Customs Commissioners The following cases were referred to in the judgment: Bulkliner Intermodal LtdTAX [2010] UKFTT 395 (TC); [2011] TC 00677 Gamble v RoweTAX [1998] BTC 456 Costs - Appeal in standard category before First-tier Tribunal - Appeal compromised on day of......
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...of the other side.” 20 Judge Bishopp also cited with approval what had been said by the FTT in Bulkliner Intermodal Limited v HMRC [2010] UKFTT 395 (TC) (‘ Bulkliner’). In Bulkliner, the FTT had stated that it was not possible for a party to rely on unreasonable behaviour of the other part......
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Swales
...approach to the application of rule 10(1)(b). I would sound a note of caution about the proviso discussed in Bulkliner Intermodal Ltd [2011] TC 00677 and Marshall & Co v R & C Commrs [2016] BVC 509 that pre-commencement conduct may be relevant if there is bad faith. That should not be read ......