Blaze Group Holdings Ltd v Commissioners for Her Majesty's Revenue and Customs

Facts

Blaze Group Holdings Ltd appealed against VAT default surcharges imposed by HM Revenue and Customs in respect of the VAT periods 06/10, 09/10 and 12/10. The appellant's managing director, Mr Fred Allen, was telephoned on 28 February 2011 by Mr Philip Stacey of HMRC and told that the company had failed to submit its VAT returns for the last three quarters. This was the first he had heard of the matter; while Mr Stacey was still on the telephone he checked with the company's accountant, Helen Clark, who assured him that the returns had been submitted. The file recording the returns was said to have been sent to Ramsgate for archiving, but could not be found there. Helen Clark had been discovered misappropriating at least £45,000 some two years earlier; Mr Allen, who had employed her for twenty years, gave her another chance and moved her to a position without access to funds, which included preparing the VAT returns. From the 06/10 period HMRC required returns to be filed online and payment to be made electronically by AUDDIS, so Mr Allen no longer signed a paper return and cheque. Ms Clark intercepted HMRC's letters and calls and authorised HMRC's estimated assessments to be taken by AUDDIS. The missing returns and payment were submitted on 7 March 2011.