Law Report: VAT offences should be indicted separately

Friday Law Report: 27 November 1998

WHERE IT was alleged that an accused had committed two different forms of conduct during the same period, both of which constituted an offence contrary to section 72(8) of the Value Added Tax Act 1994, they should be charged in separate counts in the indictment.

The Court of Appeal dismissed the interlocutory appeal of Bert Stanley under section 9(11) of the Criminal Justice Act 1987 against the decision of the trial judge to allow the amendment of an indictment preferred against him.

The appellant was one of seven men facing trial on an indictment alleging the evasion of VAT. When the bill of indictment was preferred it contained a single count alleging conduct which must have involved the commission of offences under section 72(1) and/or section 72(2) of the Value Added Tax Act 1994, contrary to section 72(8) of the Act. The particulars of the offence alleged conduct in relation (i) to the under statement of output tax, and (ii) to false claims in respect of input tax.

On arraignment, the appellant pleaded not guilty, but subsequently indicated to the Crown that he was prepared to change his plea, but only the basis that he admitted fraudulent conduct in relation to input tax.

The Crown did not accept that the appellant's involvement was so limited. The appellant's offer of a guilty plea on a limited basis caused them to reconsider the indictment, and to conclude that, in that the single count allowed guilty pleas or convictions which left at large or unresolved the question of the amount of tax evaded and the means by which it had been evaded, it could be said to be defective within the terms of the Indictments Act 1915.

They applied to the trial judge to amend the indictment so as to split the single count into two separate counts. They were in identical terms, save that the first count contained as particulars of conduct the conduct contained in the original indictment relating to output tax, and the second count contained the original particulars relating to input tax.

Despite the appellant's opposition to the application, the judge allowed the amendment, and the appellant apealed against his order under section 9(11) of the Criminal Justice Act 1987.

Benjamin Nicholls (Registrar of Criminal Appeals) for the appellant; Malcolm Morse (Solicitor for HM Customs and Excise) for the Crown.

Mr Justice Kay said that an indictment could be amended where it was defective, where an amendment was needed to meet the circumstances of the case, and where there would be no injustice to the accused.

The court had deliberately chosen to give a wide meaning to the word "defective", so as to render indictments capable of deciding the issue that properly should be determined between the Crown, on the one hand, and the defendants on the other.

In the present case, the Crown said that there were two distinct ways in which the fraudulent evasion of VAT had taken place, and that those were matters that ought properly to be the subject of a determination by a jury, rather than being left for resolution by a judge, provided that that could properly be done in an indictment.

In so far as an indictment was drawn which did not allow for such determination by a jury, it could properly be described as defective, and the question then arose whether it could be amended to a form which would enable the issues to be resolved.

It was submitted that section 72(8) of the 1994 Act, against which both offences were alleged to have been committed, created a single offence relating to a person's conduct during a specified period, and that it was not open to the Crown to allege two different forms of conduct in separate counts in the same indictment.

However, where the Crown could specify two different types of conduct, albeit taking place during the same period, those could and should be separated so that the jury could resolve the particular issues.

Kate O'Hanlon

Barrister