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	United Kingdom VAT & Duties Tribunals Decisions
You are here: BAILII >> Databases >> United Kingdom VAT & Duties Tribunals Decisions >> Bennett v Revenue and Customs [2005] UKVAT V19305 (26 October 2005) URL: http://www.bailii.org/uk/cases/UKVAT/2005/V19305.html Cite as: [2005] UKVAT V19305

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19305

VALUE ADDED TAX – Compulsory registration – Appellant a market trader –whether the Appellant's turnover was high enough to require registration – only issue was whether one of the stalls operated was operated as part of the Appellant's business rather than as his wife's separate business – Held on the evidence the stall was operated as part of the Appellant's business – appeal dismissed

LONDON TRIBUNAL CENTRE

LESLIE BENNETT Appellant

- and -

THE COMMISSIONERS

FOR HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: JOHN WALTERS QC (Chairman)

MRS LYNNETH SALISBURY

Sitting in public in London on 5 September 2005

The Appellant appeared in person

Mrs P.A. Crinnion, Advocate, of the office of the Solicitor for HM Revenue & Customs, appeared on behalf of the Respondents

© CROWN COPYRIGHT 2005


 


DECISION

1. Mr. Bennett ("the Appellant") is a market trader. He appeals against a revised assessment to VAT dated 8 November 2004. The assessment charges VAT of £6854.15 and a penalty of £771.09 in respect of the period from 1 September 2001 to 31 August 2002 during which the Respondent Commissioners ("the Commissioners") submit that the Appellant was liable to be registered for VAT.
2. The Appellant submits that he was not liable to be registered on 1 September 2001 or at all. The only matter in dispute is whether the turnover from a stall operated at Northampton ought to be included in the turnover of the Appellant's business. The Appellant submits it should not, because the stall was operated by his wife as her own business. The Commissioners, through Mrs. Crinnion, contend that it should, because to the extent that the Appellant's wife was operating the Northampton stall, she was doing so as his employee. The Appellant said that he was not contesting the Commissioners' figures.
3. The Tribunal heard evidence from the Appellant and from the following officers of the Commissioners: Tracey Benfield, of the Oxford JOSET team (joint shadow economy team established by the then Customs and Excise and Inland Revenue); Jenny Pritchard, of the VAT Registration Unit at Wolverhampton; and Nicola Jones, a senior officer at the Wolverhampton Unit.
4. From the oral evidence and the documents in the bundle before us, we find the following facts.
5. The Inland Revenue (through an inspector of taxes called Mr. Coulter, who did not give evidence to the Tribunal) carried out an enquiry into the Appellant's income tax returns for 1998-99 and 1999-2000. In the course of this enquiry, Mr. Coulter interviewed the Appellant in the company of his accountant and tax advisor, a Mr. Patel, on 21 May 2001. A long note of that meeting, prepared by the Inland Revenue and signed by both the Appellant and Mr. Coulter, and another inspector of taxes, was in evidence.
6. In the course of that meeting (according to the note), the Appellant said that "he worked 3 or 4 days a week at Olney and Northampton Markets. [He] confirmed that he worked Olney market on Thursday and Northampton on Tuesday, Friday and Saturday." Later the Appellant "stated that he and his wife attended the stalls together and said that they never did 2 on the same day. However when he goes to the Cash & Carry, Mrs. Bennett runs the stall on her own. [The Appellant] stated that no one else worked at the stalls. Mrs. Bennett is now [May 2001] being paid £70 per week."
7. Later in the meeting, some time after these statements had been made, Mr. Patel asked for the opportunity to have a private discussion with his client, the Appellant. When they returned to the meeting, the Appellant "explained that he did Tuesday, Friday and Saturday at central Milton Keynes market and Thursday at Olney. Mrs. Bennett runs the other stall at Northampton on her own on Tuesday, Friday and Saturday. He added that he did not mention this before because the stall in Northampton did not make any money."
8. Although the Appellant suggested that any income tax liability from the Northampton stall should be treated as Mrs. Bennett's, the Inland Revenue did not accept this, because his accounts had included a deduction for his wife's wages and the Northampton stall was in both names. Mrs. Bennett did not commence self-employment for income tax purposes until 1 June 2001. Her 2001-2002 income tax return confirmed that she was an employee of the Appellant up to 31 May 2001.
9. Following the meeting on 21 May 2001, Mr. Coulter corresponded with Mr. Patel and eventually (on 25 July 2001) forwarded to Mr. Patel suggested proposals for settlement. These included an estimate of takings from the stalls in Olney and Northampton, which had admittedly not been recorded by the Appellant. On 1 July 2002 the Appellant signed and submitted a self-assessment return to the Inland Revenue covering an accounting period form1 October 2000 to 30 September 2001 showing sales of £68,531. He later submitted a self-assessment return covering an accounting period from 1 October 2001 to 30 September 2002 showing sales of £52,834. It was on the basis of these figures and others supplied by the Appellant that Officer Jenny Pritchard had calculated the Appellant's liability to be registered for VAT and the VAT due. As mentioned above, the figures are not disputed by the Appellant.
10. On this basis Mrs. Crinnion supported the VAT assessment, which had treated the estimated takings from the Northampton stall as part of the turnover of the Appellant's business.
11. The Appellant's case before the Tribunal was that this was an incorrect approach because the Northampton stall was not part of his business in the period assessed, 1 September 2001 to 31 August 2002. He maintained that the stall was run independently by his wife in that period. He said that the only employee he had was his son – not his wife.
12. He accepted that he had signed the notes of meeting with the Inland Revenue and the self-assessment returns on which the Commissioners relied, but that he should never have done so, as they were incorrect. His wife worked the stall in Northampton as her own business.
13. Mrs. Bennett did not appear as a witness before the Tribunal, nor did the Appellant's son. Therefore the Appellant's evidence was not corroborated by either of them. The Appellant's evidence before us was confused. He gave no explanation, which we could regard as satisfactory, for resiling from the account of events which he had eventually given to the Inland Revenue and accepted as valid for income tax purposes.
14. In all the circumstances, the Tribunal has no hesitation in deciding that the Appellant has failed to discharge the burden on him of proving the assessment is wrong or excessive, and (since the Appellant does not dispute the figures) in upholding the assessment and the penalty. The appeal is dismissed.

JOHN WALTERS QC

CHAIRMAN

RELEASED: 26 October 2005

LON/04/2287