Space Solutions Limited v Her Majesty's Revenue & Customs

Facts

The appellant, Space Solutions Retail Ltd, manufactured retail wooden stalls for retail merchandising units from an address in Huddersfield and had been registered for VAT with effect from 1 December 2003. By letter of 13 May 2004 Customs issued a notice of requirement to give security under Schedule 11 para.4(2)(a) of the Value Added Tax Act 1994, in the sum of £18,700 if quarterly returns were made or £12,500 if monthly returns were made. The decision was taken by Mrs Stanley and confirmed on reconsideration by Mr Price, on the basis of links between the appellant and other companies which had de-registered owing large sums to Customs. Mr Hafiz Noorullah, a director of the appellant, had been company secretary of Victoria Trading and Distribution International Ltd, whose VAT liability was £80,637.55, and a director of Ayslesmead Business Services Ltd, whose VAT liability was £444,343.50 and which had traded from the same premises as the appellant. In his notice of appeal dated 18 June 2004 Mr Ullah contended that Victoria had been hijacked, that he had sold Ayslesmead to a Mr Wilmott, and that the requirement was unreasonable and would force the appellant into liquidation. An earlier dismissal in the appellant's absence had been set aside on reinstatement, and the appeal was heard afresh.