CPR Commercials Ltd v Revenue & Customs (PROCEDURE : Other) -[2019] UKFTT 219 (TC)- (03 April 2019)

Key Facts

Tax Type

Issues

• The Tribunal considered whether the failure to specify dates in the Sch 36 Notice rendered it invalid and whether TMA s 114(1) could cure the form defect. They found that the omission was not fundamental and was remedied by TMA s 114.
• The Tribunal determined that Items 1, 2, and 4 were statutory records under Reg 31, thus non-appealable. Item 3 was not a statutory record and the appeal was allowed for that Item.
• The Tribunal assessed if the Items were reasonably required for checking VAT returns. They found Items 1, 2, and 4 relevant for verifying zero-rating based on exports, but Item 3 was not reasonably required for tax checks and the appeal was allowed for that Item.

Tax Years

• 2015
• 2016

Holdings

• The Tribunal dismissed CPR's appeal regarding Items 1, 2, and 4 as they were statutory records under VAT Regulations 1995, but allowed the appeal for Item 3, which was not reasonably required to check the tax position.
• The Tribunal upheld the penalties for non-compliance with Items 1, 2, and 4 of the Notice, as CPR failed to provide the required statutory records.
• The Tribunal determined that the Sch 36 Notice was valid under Taxes Management Act 1970, s 114, as the omission of specific dates did not affect its substance and the taxpayer was not misled.

Remedies

• The penalties for non-compliance with Items 1, 2, and 4 were upheld, including a fixed penalty of £300 and a daily penalty of £30 per day, totaling £1,230.
• The appeal was dismissed for Items 1, 2, and 4 because these items required the provision of statutory records, which cannot be appealed under Sch 36, para 29(2).
• The appeal was allowed for Item 3 because the request for confirmation of who arranged for collection, delivery, and payment of the goods was not reasonably required for checking CPR's tax position.

Tax Issue Category

Legal Principles

• The Tribunal applied the ejusdem generis principle to interpret the term 'other proceeding' in TMA s 114(1) as a reference back to the items listed in TMA s 113(3). This allowed the Tribunal to conclude that the Sch 36 Notice fell within the scope of 'other documents required to be used in assessing, charging, collecting and levying tax', thereby validating its use of statutory construction to address form defects.
• The Tribunal applied the 'substance over form' principle to determine that omissions in the Sch 36 Notice (e.g., failure to specify dates) did not invalidate it if the substance of the request was clear. This was supported by case law (Pipe, Donaldson, Archer) showing that minor form errors do not affect validity if the recipient could objectively discern the intended period or requirements.

Precedent Name

• HMRC v Donaldson
• R (oao Archer) v HMRC
• Pipe v HMRC
• McGuinness v HMRC

Cited Statute

• Taxes Management Act 1970
• Finance Act 2008
• Value Added Tax Regulations 1995

Penalty Amount

Judge Name

• John Adrain
• Anne Redston

Passage Text

• The appeal is dismissed in relation to Items 1, 2 and 4 because these requests were for statutory records. The appeal is allowed in relation to Item 3, because it was not reasonably required for the purposes of checking CPR's tax position.
• applying the test in Donaldson, Mr Archer's liability could have been easily worked out, and he can have been in no doubt what he owed HMRC... the closure notices were validated by s 114.
• Item 1 asks for 'trade accounts'... we find that the reasonable person would understand that 'trade accounts' were the internal records kept by a firm in relation to its transactions and so form part of his 'business and accounting records'.