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Corvi (t/a A & B Corvi Seaview Cafe) v Revenue & Customs [2011] UKFTT 758 (TC) (23 November 2011)
URL: http://www.bailii.org/uk/cases/UKFTT/TC/2011/TC01595.html
Cite as:
[2011] UKFTT 758 (TC)
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Bartholomew Corvi t/a A & B Corvi Seaview Cafe v Revenue & Customs [2011] UKFTT 758 (TC) (23 November 2011)
VAT - APPEALS
Applications generally
[2011] UKFTT 758 (TC)
TC01595
Appeal number: TC/2010/04577
Value
Added Tax – Application to strike out repayment claim – s. 80 (1) Value Added
Tax Act 1994 – three year time limit – s. 80 (4) Value Added Tax Act 1994 –
whether valid claim for repayment of output tax was made pursuant to Regulation
37 Value Added Tax Regulations 1995/2518 – Application allowed.
FIRST-TIER TRIBUNAL
TAX
BARTHOLOMEW
CORVI T/A
A
& B CORVI SEAVIEW CAFE Appellant
-
and -
THE
COMMISSIONERS FOR HER MAJESTY’S
REVENUE
AND CUSTOMS Respondents
TRIBUNAL JUDGE: W Ruthven Gemmell, WS
Sitting in public at George
House, 126 George Street, Edinburgh on 11 November 2011
No appearance for the
Appellant
Kim Tilling, H M Revenue and
Customs for the Respondents
© CROWN COPYRIGHT
2011
DECISION
Introduction
1. This
is an Application by the Commissioners for Her Majesty’s Revenue and Customs
(“HMRC”) to Strike Out an appeal by Bartholomew Corvi T/A A & B Corvi
Seaview Café (“BC”) to claim VAT paid on a gaming machine intimated on 13 February
2011 in respect of takings in “a period prior to 2005”.
2. The
grounds of the Application were that the claim was for an unspecified amount
that was unquantified and, even if the claim was valid, it was received outside
the statutory time limits imposed by Section 80(4) VAT Act 1994.
3. No
appearance was made by BC.
Legislation
4. At
the material time, the relevant provisions of Section 80 Value Added Tax Act
1994 ("VATA 1994") were as follows:
(1) Where a person has (whether before or after the
commencement of this Act) paid an (amount to the Commissioners by way of VAT
which was not VAT due to them, they shall be liable to repay the amount to him.
(2) The Commissioners shall only be liable to repay
an amount under this section on a claim being made for the purpose.
(3)….
(4) The Commissioners shall not be liable, on a
claim made under this section, to repay any amount paid to them more than three
years before the making of the claim."
5. Regulation
37 of the VAT Regulations SI 1995/2518 provides:
"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 is calculated."
6. In
short, this appeal concerns the question whether the Appellant made a valid
claim in respect of the overpayment of VAT within Regulation 37 within the
three year time limit imposed by s80(4).
Cases Referred To
A Russell Heating v HMRC [2008], (TC20681)
Botanical Catering Ltd v HMRC [2009], (TC00212)
Enviroengineering Limited v HMRC [2011], (TC01221)
The Facts
7. The
following facts were found –
8. BC
is a sole proprietor and had been registered for VAT since 1993.
9. On
13 February 2001, BC wrote to the Protective Claims Error Correction Team of
HMRC in Liverpool stating that BC had had a gaming machine on his premises for
many years and had paid VAT on the takings. It had been brought to his
attention that there were cases pending where it may not have been correct to
have been charged VAT for a period prior to 2005. The letter stated “I would
like to register my interest in this to claim any refund of VAT depending on
any future developments. P.S. I no longer have a machine since last year”.
10. HMRC replied by
letter dated 5 April 2011 stating that HMRC were only considering claims received
in relation to gaming takings from the period 1 November 1998 to 5 December
2005. The letter stated “The protective claim you have submitted is incomplete
as it is unspecific and is unquantified which does not constitute a valid
(sic). However, all claims are subject to the normal time limits. Since the claim
was not received until 17 February 2011, it falls outside the time limits as
detailed in Section 80(4) of the VAT Act 1994. Consequently, the claim is
formally rejected”.
11. On 28 April 2011 BC submitted an appeal against the decision to refuse the claim.
12. Accompanying the
appeal was a letter dated 26 April in which BC sought to quantify the claim and
advised that as it was only a protective claim the time limits to bring a claim
should not apply.
13. On 7 July 2011, HMRC issued a Notice of Application to strike out the appeal on the grounds
that the claim did not satisfy the legislative requirements and that the claim had
been brought late.
Submissions by HMRC
14. HMRC say there
are transitional arrangements in place following the change of time limit from three
to four years to prevent any claim made between 1 April 2009 and 31 March 2009 or thereafter for periods ending 1 April 2006 for this type of VAT reclaim.
15. HMRC say the claim
must fail as the claim made by letter 13 February 2011 was both unquantified and unspecific and contrary to the legislative requirements.
16. HMRC say that BC
has failed to demonstrate that the claim was made timeously and that until such
time as a claim is complete, in terms of satisfaction of Regulation 37, it is not
a valid claim.
17. HMRC refer to
the case of A Russell Heating as authority for the proposition that the
legislation cannot be disapplied on the grounds of hardship or exceptional
circumstances, except so far that is provided within the legislation, which it
is not in the case of Section 80.
18. HMRC cite the
appeal of Enviroengineering Limited as authority for the proposition
that the Tribunal may exercise its powers to strike out an appeal under Rule
8(3)(c) of the Tribunal Procedure (First tier) (Tax Chamber) Rules 2009 and
confirmation of the effect of “capping provisions”.
19. HMRC says if a
late claim is allowed this would sidestep the statutory capping provision in
respect of which HMRC would suffer prejudice.
20. HMRC say that as
the claim was subject to a three year cap, the claim needed to be made by 2008.
21. HMRC say that as
no date was specified in the original claim, they do not know whether it was to
the end of or during 2008 but say that it is irrelevant as the claim was not
made at any time during 2008, nor by 1 April 2009 at the latest.
22. HMRC say that there
is no such concept in the VAT legislation as a protective claim and that the
taxpayer must either make a claim or not make a claim.
23. HMRC refer to
the case of Botanical Catering Limited as authority for the proposition
that Section 80 of the VAT Act 1994 gives no discretion either to the HMRC or
to the Tribunal in relation to claims that are made out of time.
Reasons for Decision
24. The claim made
on 13 February 2011 in respect of “ a period prior to 2005” is clearly out of
time in terms of Section 80 of the VATA 1994. Similarly, any such claim under
Section 80 requires to be made in terms of Regulation 37 which state that the
claim must be 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”. No such statements were made and so the claim
was unspecified and unquantified.
25. No basis for a “protective
claim” under the VAT legislation that was put forward and no authority was
produced, that even if there were a protective claim, this would allow the time
limits to be waived or modified.
26. Consequently,
following the Judge’s decision in the A Russell Heating case the
Tribunal cannot alter the correct legal option on the basis of individual circumstances.
27. The claims and
questions were made outside the three year limit applicable and can be disallowed
under Section 80.
28. The Application
to strike out the appeal under Rule 8(3)(c) is allowed.
29. 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.
W RUTHVEN GEMMELL, WS
TRIBUNAL JUDGE
RELEASE DATE: 23 NOVEMBER 2011
