Prebble C & Prebble H (trading in partnership) v Her Majesty's Revenue & Customs

Facts

The appellants, C Prebble and H Prebble, traded in partnership and were assessed to a civil penalty for dishonest conduct by the Commissioners of Customs and Excise. The penalty notice, issued on 14 July 1998, was a single penalty covering a seven year period from 1991 until 1998. The appellants appealed and the matter came on for hearing before the tribunal in 2000, when no one appeared to represent them; a reasoned decision was published, and the tribunal subsequently gave leave on Mr C Prebble's application under rule 26(2) of the Value Added Tax Tribunals Rules 1986 for the matter to be re-heard. At the re-hearing on 12 December 2003 before a differently constituted tribunal Mr C Prebble attended, gave evidence and presented the appellants' case; the tribunal found that the dishonest conduct had begun some three years into the seven year period and specifically rejected as dishonest conduct the deregistration of the business effected on the appellants' application in 1991. The tribunal did not determine the appeal then, but invited further argument on whether the penalty notice was legally ineffective as violating the time limits governing out of time assessments. A hearing fixed for August 2004 was vacated because of other pressures on Mr Prebble. By the time the hearing took place on 1 November 2005 Mr Prebble was in prison, and the tribunal proceeded in the appellants' absence, holding the penalty notice valid but excessive and reducing the penalty from £13,910 to £6,845. Mr Prebble then applied for the decision to be set aside and the matter re-heard.