Stephen Simmons (t/a SJS Motors) v Commissioners for Her Majesty's Revenue and Customs

Facts

The appellant, Stephen Simmons, traded as SJS Motors, a motor dealing business. He had been the sole director of SJS Motors Ltd, which ceased trading and cancelled its VAT registration in 2000. Thereafter the appellant carried on the same line of business from the same premises, but as a sole trader rather than through the company. He did not register for VAT in that new capacity, notwithstanding that the turnover threshold for registration was exceeded. He relied at the material time on his own sources of advice when deciding not to register, despite the continuation of the business. It was only later, upon receiving correct advice from an adviser retained by him that he was in fact obliged to register as a sole trader, that the position was put right; his response at that stage was honest, prompt and cooperative. The Commissioners for Her Majesty's Revenue and Customs levied a penalty on the appellant for failing to register for VAT despite exceeding the turnover threshold. He appealed to the First-tier Tribunal (Tax Chamber) against that penalty, contending in substance that he had a reasonable excuse, the change in the legal identity of the proprietor of the business not having been notified to him as giving rise to a fresh duty to register. There was no dispute of fact between the parties on any issue before the Tribunal.