Contractor wins appeal over VAT
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.AN ELECTRICAL contractor whose cash flow was hit by late payments from his main customer - a local authority - yesterday won the latest round in his legal battle with Customs and Excise.
Three Court of Appeal judges ruled by a two-to-one majority that Customs and Excise was wrong to impose a surcharge of more than pounds 1,000 on John Steptoe, of Barkingside, Essex, for delay in making value-added tax payments.
The decision upheld earlier rulings by a VAT tribunal and the High Court that Mr Steptoe had a reasonable excuse for failing to pay his tax on time because the London borough of Redbridge, for which he did 95 per cent of his work during the relevant accounting periods in 1987 and 1988, was late in meeting his bills.
The tribunal had said it was 'one of those rare cases' where the taxpayer might legitimately put forward as a reasonable excuse the unexpected and continuing conduct of the person who caused his prolonged shortage of funds. That decision was backed by the High Court.
Yesterday the Master of the Rolls, Lord Donaldson, and Mr Justice Nolan agreed and dismissed an appeal by the Customs and Excise. Lord Justice Scott said he would have allowed the appeal.
Mr Steptoe, who had represented himself throughout his legal fight, was not in court. He was awarded costs.
Customs and Excise was refused leave to appeal to the House of Lords, but can still apply direct to the Law Lords for leave.
Lord Justice Nolan, giving the main judgment in favour of Mr Steptoe, said Customs argued that if its appeal failed all reasons for insufficient funds were capable of being advanced as 'reasonable excuses' for late payment.
But this concern was 'exaggerated', the judge said. As a general rule the Customs and Excise Commissioners and the VAT Tribunal could be trusted to determine in any given case whether a reasonable excuse for non-payment existed.
He was unable to conclude that the tribunal was wrong in law in deciding that Mr Steptoe had a reasonable excuse.
Yesterday's decision is not seen as opening the floodgates for other VAT-registered businesses to delay payments until they have been paid by their customers or clients. It was made clear by the VAT tribunal that the case was rare and decided on its individual circumstances.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments