Rue (formerly trading as Hermitage Clean Care) v Revenue & Customs [2011] UKFTT 205 (TC)

FTT-Tax
Rue (formerly trading as Hermitage Clean Care) v Revenue & Customs
[2011] UKFTT 205 (TC) · 2011-03-24
[1]This matter came before us on a preliminary hearing. The Appellant had submitted an appeal to the Tribunal dated 30 June 2010 which purportedly appealed against a decision dated 6 August 2001 and referred to the sum of £3,600 as the “amount of the tax or penalty” appealed against.[2]In his notice of appeal, he gave the date of 17 July 2010 as “the latest time by which appeal ought to have been made or notified” but requested permission to appeal outside the relevant time limit, giving the following grounds:
“I am late with my appeal because the Courts having bankrupted me I thought I had to go through the Courts to right the wrong which had been done to me and my business.”
[3]The full grounds of appeal given by the Appellant were as follows:
“In the first place VAT had altered my records to create a debt which otherwise wouldn’t have existed (see acc. documentation) and compelled me, through a Statutory Demand to pay that debt. I went to court in May of 2008 to apply for an annulment and was unsuccessful. I went to the Appeal Court in Birmingham and again was unsuccessful. I went to the Appeal Court in London (at the Royal Courts of Justice) and they seem to be finding any excuse they can not to deal with my case. I’m trying you now (and including all relevant correspondence) to see what you do. I anticipate my next step being the House of Lords and/or the European Courts and/or the media to aid my case and get justice.”
[4]The Appellant went on to identify the following as the decision he was seeking:
“I should not have been bankrupted. VAT owed me £5,600 when they did that for £3,600. They cost me my house, pensions and ultimately my business.”
[5]Attached to the notice of appeal was a copy of a letter dated 17 June 2010 from an officer Heather Allan at the “VAT Error Correction Team (Leeds 017)” in Liverpool, which read as follows:
“Dear Sir VAT Registration No: XXX XXXX XX Further to your disclosure notifying the Commissioners of HM Revenue & Customs of your correct liability, the following assessment(s) of tax have been made for the periods shown: Period: Due to HMRC Due from HMRC 01/00 £1,750.00 04/00 £1,100.00 07/00 £750.00 If you disagree with any amount assessed you may request a reconsideration by the office of issue, where the evidence to support your request will be examined. Also in respect of any amount assessed you have the right to appeal to an independent VAT Tribunal. If you wish to request reconsideration or submit an appeal to a tribunal you must do so within 30 days from the date of this notification. Subject to the legal provisions relating to such appeals the amount of £3,600 is now due from you and should be paid immediately to VAT Central Unit, Alexander House, 21 Victoria Avenue, Southend on Sea, Essex SS99 1AV. PLEASE ENCLOSE THE DUPLICATE COPY OF THIS LETTER WITH YOUR REMITTANCE. Yours faithfully.”
[6]There were various other documents attached to the notice of appeal:(1) A copy of the first page of a Bankruptcy Petition issued by HMCE (as it then was) in relation to the Appellant. This first page was not dated, but the Appellant told us it was issued in about August 1995 at the start of the original bankruptcy proceedings against him. This petition referred to an aggregate debt then outstanding of £6,463.45, made up as follows: Date Due Date Description Amount 31.07.92 31.08.92 RETURN £2,893.39 31.07.92 30.08.92 SURCHARGE £178.67 31.10.92 30.11.92 RETURN £2,442.27 31.10.92 30.11.92 SURCHARGE £61.00 31.08.93 30.09.93 Underdeclaration £694.01 31.07.94 31.08.94 RETURN £1,776.37 31.10.94 30.11.94 RETURN £1,863.59 31.01.95 28.02.95 RETURN £1,488.78 Total outstanding debt and interest: £11,398.08 Less reductions made to date (if any) £4,934.63 AMOUNT NOW DUE £6,463.45(2) A copy of a letter dated 12 January 2009 from the Appellant addressed to “Judge Kirkham” in connection with his appeal to have his bankruptcy annulled. This letter set out a number of calculations designed to show that the supposed debt due to HMCE of £11,398.08 should in fact have been a sum due to him of £5,670.11.(3) A copy of a document headed “Section 8 – Arguments in support of grounds” which was prepared by the Appellant as a skeleton argument in the earlier court proceedings. It set out a number of matters which, the Appellant contended, showed how his debt had been wrongly built up by HMRC in the 1990’s and early 2000’s.(4) A copy of a letter from the Appellant apparently written in stages on 23 February, 2 March, 16 March and 7 April 2010 to an unidentified court in reply to an earlier letter dated 29 October 2009 in relation to the Appellant’s appeal to that court. This letter had two versions of a running account attached. The running accounts purported to show the full history of the Appellant’s VAT account with HMCE/HMRC from his commencement in business in 1986 up to cessation in 2001. One version appears to have been generated in 2001, the other some time later. The Appellant’s letter referred to various items on the two running accounts in seeking to substantiate his claim that HMRC had bankrupted him at a time when they owed him £5,000.(5) Copies of two orders made on 1 May and 20 August 2008 by the Leicester County Court, one of which dismissed the Appellant’s application to annul bankruptcy proceedings against him.[7]When the notice of appeal was received at the Tribunal, a reply was sent to the Appellant, noting that he had applied for the appeal to proceed without payment or deposit of the VAT claimed, on grounds of hardship. He was told that the Tribunal would write to him again once a reply to that application had been received from HMRC.[8]It took a little while for HMRC to respond as the file was passed to Mr Holl and he tried to understand the appeal and the history of the case. In the end he was unable to do so, except to the extent of questioning whether there was an outstanding appealable decision to which an appeal could validly relate. He therefore requested that the appeal be listed for a directions hearing as soon as possible so that matters could be clarified. In reply, the Appellant set out some more of the historical detail and agreed that a preliminary hearing would be useful. In reply to that letter, Mr Holl pointed out that the Appellant had not satisfactorily addressed the “out of time” issue, and repeated his request for a preliminary hearing.[9]This hearing eventually came before us on 7 March 2011. The preliminary hearing[10]The first thing we attempted to do was to get to the bottom of the actual liabilities which the Appellant was appealing against, in order to satisfy ourselves that there was an appealable decision and also so that we could consider the issue of time limits for appeal and, if relevant, hardship.[11]Mr Holl was unable to give any background to the sending of HMRC’s letter dated 17 June 2010, but he was able to assure the Tribunal and the Appellant that HMRC records showed the Appellant as not owing any outstanding debt to them. On the face of it, this appeared to dispose of the issue that had given rise to the appeal in the first place.[12]However, the Appellant stated that this was not the case and his real complaint related to what he referred to as the “fraud” of HMCE in 1995 to 2001, as a result of which he had been made bankrupt for some £5,000 of debt which he said he did not actually owe.[13]We invited him to substantiate this assertion by reference to items on the running accounts which might be appealable matters. He sought to persuade us that HMCE had fabricated a return he was supposed to have made for period 07/92, thereby creating a large and fictitious debt which was a significant element of the statutory demand which led to his bankruptcy. There were clearly some unusual features of the running accounts, but we were satisfied that any overstatement of the Appellant’s VAT liability for the 07/92 period was no more than around £1200 and was corrected later in the running account (probably around 1997). At this level, it would not have had any material effect in the context of his bankruptcy proceedings, even if he were able to establish the facts he asserted.[14]The Appellant was also adamant that various payments he had made were not taken into account in the bankruptcy proceedings, but was unable to demonstrate this to our satisfaction. He did not seem to accept that when he made general round sum payments on account of his estimated VAT liability (at a time when he was unable, for various reasons, to file VAT returns), those payments were allocated by HMCE to the earliest outstanding debt rather than to the specific liability he had in mind; the effect of this was that due to the imposition of surcharges, etc, his VAT account appears to have been consistently in arrears.[15]There were clear evidential difficulties, in that the running accounts were effectively the only available evidence as to his historical VAT affairs. His own records had been taken by the Official Receiver in his bankruptcy and subsequently destroyed. Given that the events complained of took place between about 10 and 20 years ago, HMRC’s records were also sketchy or non-existent. We felt that it would be impossible, after such a long delay, for the facts to be properly established. It was clear that any appealable matter about which the Appellant wished to argue would have taken place at least 10 (and up to 20) years in the past and we could not see any justification for permitting the appeal to proceed so long after the event. Furthermore, the Appellant was unable (with the exception of the 07/92 VAT return figure, which had subsequently been corrected) to point to any specific assessment, surcharge or other appealable matter listed in the running accounts which he was in a position specifically to contest.[16]We therefore concluded that, insofar as the HMRC letter dated 17 June 2010 disclosed an appealable matter, the Tribunal would have jurisdiction to hear an appeal (subject to granting permission to appeal out of time, if relevant, and hardship). We further concluded that no other appealable matter had been identified to the Tribunal by the Appellant (and even if such an appealable matter had been identified, we would have refused permission for an appeal to proceed out of time in relation to it).[17]Mr Holl confirmed that HMRC could send an official letter to the Appellant confirming that, notwithstanding the content of the 17 June letter, he had no liability to them in respect of VAT arising from his former business. Decision[18]In the light of Mr Holl’s statement (and subject to that official letter being received by the Appellant) we consider that no appealable decision arises in respect of the matters set out in the 17 June 2010 letter. In the absence of an appealable decision, the Tribunal has no jurisdiction to hear an appeal and must therefore strike out the Appellant’s appeal.[19]We therefore direct that the Appellant’s appeal in relation to the assessments referred to in HMRC’s letter dated 17 June 2010 be struck out automatically upon the Tribunal receiving from HMRC a copy of a letter sent to the Appellant by them containing their confirmation to him that he has no liability to them in relation to the VAT affairs of his former business, and in particular that he has no liability for the assessments totalling £3,600 referred to in their letter dated 17 June 2010.[20]In relation to the remainder of the matters summarised above, we find that there is no appealable decision against which the Appellant has identified that he wishes to appeal and therefore the appeal should be struck out insofar as it relates to any such matters. For the avoidance of doubt, even if such an appealable decision had been identified to us, in view of the lapse of time since the matters complained of, we would not have extended the time for giving notice of appeal and therefore we would not have admitted the notice of appeal in any event.[21]This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. KEVIN POOLE TRIBUNAL JUDGE RELEASE DATE: 24 MARCH 2011