Wilsons of Rathkenny Ltd v Revenue & Customs [2011] UKFTT 406 (TC) (22 June 2011)
[2011] UKFTT 406 (TC)
TC01261
Appeal number TC/2009/16031
Section
80 VATA 1994 – Section 121 Finance Act 2004 – whether a claim was made within
time – appeal dismissed
FIRST-TIER TRIBUNAL
TAX CHAMBER
WILSONS
OF RATHKENNY LIMITED Appellant
-
and -
THE
COMMISSIONERS FOR HER MAJESTY’S
REVENUE
AND CUSTOMS ("HMRC") Respondents
TRIBUNAL: IAN WILLIAM HUDDLESTON, TRIBUNAL JUDGE
MR. DAVID
MOORE
Sitting in public at Bedford
House, Belfast on 12 April 2011
Bernard Hayley, Officer, on
behalf of HMRC
Ms. J. Stewart, Company
Accountant, on behalf of the Appellant
© CROWN COPYRIGHT
2011
DECISION
Appeal
1. The
appeal in this case arises from HMRC's rejection of the Appellant's claim for
overpaid output tax in the sum of £20,374. The Appellant's claim is dated the
30 March 2009 and what is called a "Fleming" type claim arising, as
it does, as a consequence of the Court of Appeal decision in the case of Michael Fleming (t/a Bodycraft) -v- CRC (Condé Nast Publications Ltd
intervening) [2006] EWCA Civ 70; [2006] STC 864; [2006] All ER (D) 199 (Feb)
(Fleming).
2. The
claim was rejected by HMRC by way of letter dated the 29 April 2009.
The Facts
3. The
Appellant, Wilsons of Rathkenny Limited, is a company incorporated under the
Companies Act (NI) 1960 from the 5 November 1964 under number NI 6176.
4. The
Appellant has been registered for VAT since the 1 April 1973 under VAT
registration number 255 7624 40, and that registration remains extant. Its
trading address and registered office is 371 Cushendall Road, Ballymena, County
Antrim, BT43 6QB.
5. The
Appellant's business activity is in the motor trade and includes the sale of
new motor cars.
6. The
Appellant submitted a "Fleming" type claim on the 13 March 2009 which
related to overpaid output tax on demonstrator and courtesy cars for the period
1985 to 1996. After an exchange of correspondence between the parties, the
claim was settled in the sum of £51,212.26, plus £60,233.21 statutory
interest. The settlement of this claim was notified to the Appellant by HMRC
in a letter of the 29 April 2009.
7. At
the conclusion of the negotiations leading towards settlement of that claim, it
became apparent to the Appellant's in house accountant that there was a
further, separate, registration for Wilsons of Rathkenny Limited
(Carrickfergus) under a separate VAT registration number 392 6901 27.
According to the evidence before the Tribunal, the period of that registration
is not known, but it was accepted by all parties that the registration had been
cancelled for some considerable time.
8. It
also appears accepted that the registration related to the operation of a ford
franchise from premises at 30 Joymount, Carrickfergus, County Antrim, BT38
7DN. For the avoidance of doubt, there was no separate registration of a
company under any such name, and it simply appears that the Appellant company
used the additional word "Carrickfergus" to distinguish the different
trading activities carried on at that site.
9. The
processing of the original claim (ie. that for VAT registration number 255 7624
40) appears to have reached the stage of final settlement when HMRC wrote to
the Appellant on the 30 March 2009.
10. The Appellant,
through its accountant, Ms. Jackie Stewart (who appeared before the Tribunal
and gave evidence) responded to that letter on the same date, 30 March 2009,
broadly accepting the settlement figure that was proposed.
11. In Ms. Stewart's
letter she included the following paragraph:
"On further
discussion of the matter it has come to my attention that a satellite ford site
was run from 30 Joymount Gardens, Carrickfergus, County Antrim, from 1984 to
1994. I would therefore like to amend my claim to add five demo vehicles,
changed three times a yr, and four courtesy vehicles changed twice a yr for the
site for the ten yr period."
12. She then
included a table based on the Italian Tables Volume for substantiating that
claim for the ten year period – the claim itself amounted to £20,374, being the
amount which is now in dispute.
13. At this point I
should mention that there is a dispute on the evidence.
14. Ms. Stewart
indicated that she emailed her response to HMRC, but they, for their part, deny
the receipt of any email and their position is that the letter was only
received on the 17 April 2009 – taking the view that it therefore did not fall
to be considered as it fell outside the statutory deadline of the 31 March
2009.
15. In the absence
of any confirmation of the email transmission, the Tribunal places reliance
only on the letter.
16. That, in
essence, is the substance of the appeal, ie. whether or not there was a
"claim" and whether it had been received by HMRC before that
deadline.
Legislation
17. The legislation
in point is as follows:
(1)
Value Added Tax Act 1994, Section 80
"(1) Where a person:
(a)
has accounted to the Commissioners for VAT for a prescribed accounting
period (whenever ended); and
(b)
in doing so, has brought into account as output tax an amount that was
not output tax due, the Commissioners shall be liable to credit the person with
that amount."
(2)
Value Added Tax Regulations 1995, Regulation 37:
"37. Any
claim under Section 80 of the Act shall be made in writing to the Commissioners
and shall, by reference to such documentary evidence as is in the possession of
the claimant, state the amount of the claim and the method by which that amount
was calculated."
(3)
Finance Act 2008, Section 121
"(1) The
requirement in Section 80 of the Value Added Tax Act 1994 that a claim under
that Section be made within 3 years of the relevant date does not apply to a
claim in respect of an amount brought into account, or paid, for a prescribed
accounting period ending before 4 December 1996 if the claim is made before the
1 April 2009."
18. Very shortly,
HMRC's position is that applying that legislative position the
"claim" in relation to the Appellant's Carrickfergus operation was
not made before the statutory deadline of the 1 April 2009 – on the basis that:
(1)
the claim contained in Ms. Stewart's letter was not an
"amendment", but was a new claim; and
(2)
given that it was a new claim, it was not received before the statutory
deadline of the 1 April 2009.
Decision
19. In the exchanges
between the parties before the Tribunal, much was said about whether or not the
Carrickfergus entity was a separate "person" for the purposes of
lodging a claim and, indeed, these proceedings.
20. We find, quite
simply, that there is no dispute on this point. There was, and is, only one
company, ie. Wilsons of Rathkenny Limited, the history of which is recited
above.
21. In short,
therefore, for the purposes of the Section 80 claim there was only one
"person".
22. A
"person" however can have more than one claim and we find that was so
in this case.
23. The original
claim was processed under a specific VAT registration number (registration
number 255 7624 40). By virtue of the exchanges of letter of the 30 March 2009
that claim was settled.
24. Ms. Stewart, in
her letter of that date (by which the settlement was reached) and before this
Tribunal, attempted to argue that in raising the claim in respect of the Carrickfergus
operation she was doing no more than amending her original claim.
25. With respect, we
do not find that argument convincing. From the evidence available to us it
seems quite clear that the Appellant company operated this as a separate
business with a separate VAT registration. It could only have been in relation
to those records (under the obsolete VAT registration of 392 6901 27) that any
claim could have been progressed, and in her letter of the 30 March 2009 Ms.
Stewart did not (or probably could not) identify that VAT number which would
have been essential to pursue any claim.
26. On that basis we
therefore find any claim in respect of the Carrickfergus operation is, indeed,
out of time.
27. It naturally
follows that the appeal is dismissed.
28. This document
contains full findings of fact and reasons for the 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
not 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.
IAN WILLIAM HUDDLESTON
TRIBUNAL JUDGE
RELEASE DATE: 22 June 2011
