Bernard Lunkowsky v Her Majesty's Revenue & Customs

Facts

Mr Bernard Lunkowsky carries on business in Germany selling health products. He started in that business as a sole trader in 2003 and imported goods from the United Kingdom, incurring UK value added tax of £1034.23 during the course of 2003. He submitted form VAT 65 dated 28 February 2005 claiming a refund of the VAT charged in 2003, the form being received on 3 March 2005. By a decision dated 26 September 2005 HM Revenue & Customs refused the claim on the ground that the time limits laid down in Article 7 of the EC Eighth Council Directive on value added tax (79/1072/EEC) had not been satisfied, the claim not having been made within the statutory period. Mr Lunkowsky appealed to the VAT and Duties Tribunal against that refusal. He appeared in person and explained that, as a sole proprietor starting a small business in Germany, German law did not require him to prepare or file VAT returns for two years following the commencement of his business, so he prepared no German returns until early in 2005; he had no reason to think the United Kingdom rules differed, could not afford advice from an international tax consultant, had to research the position on the Internet, and had in the meantime moved his business from Munich to Rosenheim.