Glen Lyn Generations Ltd, Exmoor Coast Boat Cruises Ltd
| Jurisdiction | UK Non-devolved |
| Judgment Date | 16 July 2018 |
| Neutral Citation | [2018] UKFTT 394 (TC) |
| Date | 16 July 2018 |
| Court | First-tier Tribunal (Tax Chamber) |
[2018] UKFTT 0394 (TC)
Judge Rachel Short
the appellant not appearing
Mr Clarke, instructed by the General Counsel and Solicitor to HM Revenue and Customs, appeared for the respondents
L H Bishop Electric Company Ltd [2013] TC 02910 – G B Housley Ltd v R & C Commrs [2017] BVC 4 – R & C Commrs v Tower MCashback LLP 1 [2011] BTC 294 – Gardner v Blaxhill [1960] 2 AER 457 – C & E Commrs v Peachtree Enterprises Ltd [1994] BVC 209 – VAT Regulations 1995 (SI 1995/2518), reg. 25A.
The appellant concerned the filing of Value Added Tax (VAT) returns. It was found that age (51) and computer illiteracy did not prevent online filing. The Appeal was dismissed.
The Appeal concerned HMRC's decision that the Appellant were required to file their VAT returns on-line and did not qualify for an exemption under reg. 25A VAT Regulations 1995.
The Appellant had cited the following reasons for qualifying for the exemption in correspondence with HMRC:
- Age;
- Not owning a computer;
- Costs associated with travelling to a library to use a computer;
- Costs of instructing an agent to submit electronically.
The Tribunal considered whether HMRC came to an unreasonable decision. The Tribunal found that HMRC had acted reasonably in refusing the application for an exemption to on-line filing. It was also reasonable for HMRC to dismiss the lack of computer competence and lack of easy access to a computer as insufficient grounds to grant the Appellants that exemption.
HMRC contended that within reg. 25A the reference to “age” should be read with the other criteria listed and that it is intended to apply to physical infirmities arising with age, rather than just a person's age. The Tribunal disagreed with HMRC's approach.
The Judge considered the appeal on the basis that the Tribunal's jurisdiction is a supervisory one only. The Tribunal found that the Appellants age, lack of computer competence and problems with accessing a computer are not sufficient grounds to allow the Appellants to take advantage of the exemption. The Appeal was dismissed.
The case is a reminder that the commissioners need to be satisfied that it is not reasonably practical to file electronically.
[1] This is an appeal by both Appellants against HMRC's decision of 28 July 2015 that they were required to file their VAT returns on-line and did not qualify for an exemption from on-line filing under regulation 25A VAT Regulations 1995.
[2] The Appellants are represented by Mr Oxenham, a director of both of them.
[3] At the hearing HMRC told the Tribunal that Mr Oxenham had notified them that he was not able to attend because he could not travel to Exeter due to ill-health (a back problem). HMRC provided the Tribunal with copies of a letter from Mr Oxenham of 18 April 2018 stating that he could not attend the Tribunal for medical reasons.
[4] An application to postpone the hearing had already been made by Mr Oxenham and refused on 16 April 2018 because Mr Oxenham had not produced sufficient medical evidence to satisfy the judge that he was unable to travel to Exeter.
[5] Mr Oxenham did not provide any further medical evidence in his letter of 18 April 2018. The Tribunal contacted Mr Oxenham by telephone at the start of the hearing. Mr Oxenham confirmed that he could not attend the hearing but asked if he could participate by telephone. HMRC consented to attempt to allow Mr Oxenham to participate in the hearing by telephone. Due to technological problems this did not prove to be possible.
[6] HMRC made submissions that the hearing should proceed in Mr Oxenham's absence because:
- He had not provided sufficient medical evidence to support his claim that he could not travel to Exeter.
- The hearing had already been postponed on two occasions (15 June 2017 and 19 October 2017) at the request of Mr Oxenham.
- Mr Oxenham was on notice that the hearing would go ahead on 25 April.
- There was no significant prejudice in hearing the case without Mr Oxenham; in particular the appeal did not concern a large financial liability. The consequences for the Appellants were that they would be obliged to make electronic VAT returns.
- It was in line with the overriding objective of the Tribunal that the appeal should be heard without any further delay.
[7] I agreed to proceed with the hearing in Mr Oxenham's absence, not because I considered that the appeal did not have serious implications for Mr Oxenham, who obviously felt very strongly that the Appellants should not have to make on-line VAT filings, but because of the serious delay which has already been caused by previous postponements, because of Mr Oxenham's failure to submit evidence to support his position that he was unable to travel to Exeter for the hearing and finally, because Mr Oxenham, (in his letter of 18 April 2018) had provided a written skeleton argument based on article 9 of the European Convention on Human Rights (“the ECHR”), to be considered if the hearing proceeded without him, which was available to the Tribunal.
Regulation 25A VAT Regulations 1995 SI 1995 No. 2518:
(6) A person–
- (c) for whom the Commissioners are satisfied that it is not reasonably practicable to make a return using an electronic return system (including any electronic return system that that person is authorised to use) for reasons of disability, age, remoteness of location or any other reason,
is not required to make a return by regulation 25 using an electronic return system
[8] L H Bishop Electric Company Ltd [2013] TC 02910
[9] G B Housley Ltd v R & C Commrs [2017] BVC 4
[10] R & C Commrs v Tower MCashback LLP 1 [2011] BTC 294
[11] Gardner v Blaxhill [1960] 2 AER 457
[12] C & E Commrs v Peachtree Enterprises Ltd [1994] BVC 209
[13] Respondents' letter of 31 March 2015 rejecting the Appellants' application for exemption from on-line filing and saying:
As your case for religious exemption was recently rejected by the First Tier Tribunal … then the only criteria that can be considered is that it is not reasonably practicable to file electronically for reasons of age, disability or remoteness of location (i.e. resulting in poor internet coverage).
HMRC records indicate that returns have been submitted electronically on previous occasions (specifically for Glen Lyn Generations Limited) this would lend itself to nullifying the contention that it is not reasonable practicable to file on line.
Furthermore your letter indicates that you operate both businesses (the one business in conjunction with your parents) and that you are responsible for the administration of both.
To date you have presented no evidence that you individually cannot file electronically for either disability or age related reasons.
Additionally you have cited the costs incurred from the use of an accountant and the remoteness of location.
The Commissioners consider that incurring the costs of a professional to advise upon or assist with the administration of the business, is part of the integral cost of being in business and cannot in itself be used as a reason for failing to comply with the tax regime requirements.
Finally, the Commissioners accept that a rural location can present difficulties with electronic communication, however I would reiterate the fact that as electronic returns have been received on previous occasions it is a reasonable assumption that any subsequent electronic submission will be successful
[14] Appellants' letter of 23 April 2015 providing evidence of disability and age related reasons, stating in respect of Mr Oxenham that:
I am 51 years old. It means that we did not use computers at school or university, I am able to use a telephone however. As can my father who is 93 years old. What is that allows you to consider age as a reason not to file on-line? please answer this question!
[15] and by reference to previous electronic filings:
Lastly your assertion that because an electronic submission has been received on previous occasions, it would be a reasonable assumption that subsequent submissions will be successful does not in any way logically mean that it was reasonably practicable
[16] Respondents' decision letter of 28 July 2015, referring to their conclusions in their 31 March 2015 letter.
[17] Appellants' written statement of 11 March 2017 including:
If age does not relate to an inability to physically use a computer then I could only think that this age related exemption has something to do with a person “from the old days” when things were done differently (i.e. paper) …
[18] Various other correspondence between Mr Oxenham on behalf of the Appellants and HMRC and the tribunal service from 6 February 2015 to 2 May 2017, including letter of 6 February 2015 from Mr Oxenham to HMRC saying:
Lynmouth is one of the most remote places in England … it is a 50 mile round trip to South Molton to see the Accountants and I have little other business to do in the town … In our current situation a visit to our accountant incurs about £400 of costs
and letter of 23 November 2015 saying:
Of course, myself or anyone else operating a VAT business could instruct an agent by telephone to file online on our behalf. If, as HMRC suggest, this is sufficient evidence to force us to file online, then I ask what is the purpose of having an exemption on grounds of age, disability or remoteness of location. Who could possibly benefit from this exemption?
[19] Mr Oxenham's letter of 18 April 2018 to the Tribunal setting out his skeleton argument for the appeal.
[20] Exmoor Coast Boat Cruises Limited appealed against a decision of HMRC of 15 May 2012 that it should not be granted an exemption from filing its VAT returns on-line by reason of its director, Mr Oxenham's religious views. That appeal was dismissed by the First-tier Tribunal in a...
To continue reading
Request your trial