[2011] UKFTT 6 (TC)

TC00883

Appeal number TC/2010/16401

VAT – repayment claim for output tax allegedly over-assessed – time limits – VATA s80(1A),(4)&(4ZA) – FA 2008 Schedule 39 para 36 – Finance Act 2008, Schedule 39 (Appointed Day, Transitional Provision and Savings) Order 2009, article 2 – appeal dismissed 

FIRST-TIER TRIBUNAL
TAX CHAMBER

	MOBILE MOTORING MAINTENANCE LIMITED	Appellant

	- and -

	THE COMMISSIONERS FOR HER MAJESTY’S
	REVENUE AND CUSTOMS (value added tax)	Respondents

				TRIBUNAL: 	Judge Malachy Cornwell-Kelly
     		Mr Christopher Perry C. Eng

Sitting in public at Vintry House, Wine Street, Bristol on 18th November 2010

Mr Ian Lawrence of Lawrence Rose Limited, Chartered Accountants, for the taxpayer

Mr Michael Jones instructed by the General Counsel and Solicitor to HM Revenue and Customs for the Crown

© CROWN COPYRIGHT 2010
DECISION

1 This appeal is against a decision of the respondent commissioners dated 3 November 2009 confirming an earlier decision to refuse the taxpayer’s request for the repayment of £1,242.87 out of a total of £2,104 plus interest, assessed on 13 February 2006 in respect of output tax said to have been underpaid on MOT fees incurred on behalf of the taxpayer’s customers and recharged to them.  The liability issues underlying the assessment have not been relevant to this appeal, which turns solely on whether the commissioners were right to reject the repayment application on the ground that it was out of time.

2 Following the assessment on 13 February 2006, the taxpayer wrote on 6 March 2006 to the commissioners “to appeal against your decision”.  The commissioners replied on 29 June 2006 explaining their reasons for the assessment at length and reaffirming it; the letter contained a statement of the taxpayer’s appeal rights to the VAT and Duties Tribunal and its rights to make a complaint if it contended that it had been misdirected in the past.  

3 No appeal rights were exercised and no complaint was made, but on 10 April 2007 the decision of the VAT and Duties Tribunal in Duncan v HMRC [2007] UK VAT V20100 was issued, which supported the taxpayer’s case.  Mr Lawrence stated that he was “not made aware of the Duncan case by HMRC” and came across it by chance and called the HMRC helpline, who were unable to assist.  On 27 March 2009, Mr Lawrence’s firm wrote to the commissioners about the matter requesting that they should give consideration to refunding the £1,242.87 which their client had sought in its letter of 6 March 2006.

4 The commissioners replied direct to the taxpayer on 1 September 2009 that the refund request had been made more than three years after the date of the assessment and was therefore out of time.  Mr Lawrence asked for a further consideration of the case on 22 September 2009 and the commissioners’ final refusal was, as has been seen, on 3 November 2009.  The appeal to this tribunal followed on 17 November 2009.

5 The taxpayer’s returns were made quarterly, the relevant quarter for the claim under appeal covering the months of December, January and February.  Mr Lawrence’s case was that in the light of Duncan the original assessment was wrong and that in fairness it was right that the relevant time limit should run from the date his client’s first ‘appeal’ had been dismissed i.e. from 29 June 2006.  

6 Mr Lawrence also complained, on instructions, that the commissioners had taken excessively long to deal with both the original ‘appeal’ of 6 March 2006 and with his later request for a reconsideration made on 27 March 2009, that his client had felt intimidated by the inspector and was concerned that if he argued with the inspector the business would be investigated in the future and, finally, that Mrs Anne Snelgrove MP had seen correspondence about the case and had expressed herself “totally dissatisfied with it”.

7 The relevant parts of section 80 of the Value Added Tax Act 1994 provide:-
	(1A) Where the Commissioners-
(a)	have assessed a person to VAT for a prescribed accounting period (whenever ended), and
(b)	in doing so, have brought into account as output tax an amount that was not output tax due,
they shall be liable to credit the person with that amount.

	(4) The Commissioners shall not be liable on a claim under this section-
(a)	to credit an amount to a person under subsection (1) or (1A) above, or
(b)	to repay an amount to a person under subsection (1B) above,
if the claim is made more than 3 years after the relevant date.

	(4ZA) The relevant date is-
	...
(c)	in the case of a claim by virtue of subsection (1A) above in respect of an assessment issued on the basis of an erroneous voluntary disclosure, the end of the prescribed accounting period in which the disclosure was made;
(d)	in the case of a claim by virtue of subsection (1A) above in any other case, the end of the prescribed accounting period in which the assessment was made;

8 Regulation 25 of the Value Added Tax Regulations 1995 provides for the accounting periods applicable to each taxpayer and, as has been seen, the relevant period in this case ended on the last day of February, thus 28 February 2006.  The 3 year period was indeed extended to 4 years in such cases as this by the Finance Act 2008, Schedule 39 paragraph 36, but that provision only took effect from 1 April 2009 by virtue of article 2 of the Finance Act 2008, Schedule 39 (Appointed Day, Transitional Provision and Savings) Order 2009, and thus does not affect this case.

9 In the result, the claim made on 27 March 2009 was out of time, albeit by only a small amount.  The Tribunal however has no jurisdiction to vary the statutory time limits; the delays and other matters of which Mr Lawrence complained are likewise outside our jurisdiction and are issues, as we informed Mr Lawrence, for the Complaints Adjudicator.  The appeal must therefore be dismissed.

10 This document contains the full findings of fact and reasons for our decision.  Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009.   The application must be received by this Tribunal no later than 56 days after this decision is sent to that party.  The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.

Malachy Cornwell-Kelly
Tribunal Judge

RELEASE DATE: 14 December 2010