United Kingdom VAT & Duties Tribunals Decisions

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Cite as: [2004] UKVAT V18686

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Westland Horticulture Ltd v Customs and Excise [2004] UKVAT V18686 (09 July 2004)

18686

BELFAST TRIBUNAL CENTRE

WESTLAND HORTICULTURE LIMITED Appellants

(FORMERLY EDHAM LTD)

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: HIS HONOUR JUDGE McKEE (Chairman)

MR A F HENNESSEY

Sitting in public in Belfast on 16th December 2003

Mr McVeigh, accountant, appeared for the Appellants

Miss Linklater, of Counsel, appeared for the Respondents

© CROWN COPYRIGHT 2004

DECISION

The appeal lodged concerned a claimed repayment of £24,062.00 representing input tax.

The Appellant company carries on business as a wholesale supplier of peat from premises situated at Unit 14, Granville Industrial Estate, Granville Road, Dungannon, County Tyrone. The Appellant company is registered for the purposes of Value Added Tax with effect from the 1^st January 1989. A claim for credit for input tax in the sum of £24,062.00 was made by the Appellants in their return for the quarter starting February 2001. This claim was rejected by the Respondents on the grounds that it was made outside the time limits prescribed for a retrospective claim as set out in Regulation 29(1A) of the Value Added Tax Regulations 1995 which provides as follows:-

"The Commissioners shall not allow or direct a person to make any claim for deduction of input tax in terms such that the deduction would fall to be claimed more than 3 years after the date by which the return for the prescribed accounting period in which the VAT became chargeable is required to be made."

The Tribunal heard argument on the preliminary issue as to whether or not this claim had been made in time as alleged by the Appellants. Miss Linklater, for the Respondents, referred this Tribunal to the judgment of the Court of Appeal in the University of Sussex v The Commissioners of Customs and Excise (2003) EWCO civ 1448 which considered an appeal from the judgment of Neuberger J (as he then was) reported in (2001) STC 1495. A copy of the judgment of the Court of Appeal was presented to the Tribunal and the Tribunal was invited to consider the relevant paragraphs numbered 146 to 152.

In paragraph 152 Lord Justice Auld giving the judgment of the Court of Appeal agreed with Neuberger J's conclusion that the University of Sussex's claim:-

"… is not a claim for overpaid tax under section 80 but is a claim for deduction of input tax under Regulation 29(1) albeit made late. … Nor is the claim, which was made in November 1996, affected by the new retrospective three-year limitation period in Regulation 29(1A) which took effect in May 1997."

Dealing with the Appellant's argument that their claim was essentially under section 80 of the Value Added Tax Act 1994, Miss Linklater pointed out that section 80 applied only to output tax and not to input tax. Accordingly she submitted that the Appellants could not argue that the Respondents were unjustly enriched.

It was common case that the supplies in question were made in 1995/96. Copy invoices were produced. The dates derived from those invoices were sketchy in the extreme insofar as no reference was made on any of the invoices to any VAT number. Accordingly, in respect of the invoices covering the quarter May to July 1995, a claim for input tax should have been made not later than August 1998 otherwise, as Miss Linklater submitted, the three-year cap applied.

Mr McVeigh, in the course of his submissions and Mr Park in his evidence to the Tribunal explained that it had not occurred to the Appellants that one supplier (Mr Stafford), out of all their suppliers, was registered for VAT. The Appellant company does a very substantial business and derives its supplies from a number of owners of peat bogs. None of their other suppliers was registered for VAT. It eventually transpired that Mr Stafford was so registered and an agreement was drawn up between the Appellants and Mr Stafford (trading under the name of "Sunshine Peat") which agreement envisaged the possibility the VAT regulations might apply.

In closing his case, Mr McVeigh emphasised that his clients had acted in good faith throughout but, before submitting the claim for input tax, it was felt appropriate to check with Mr Stafford that he had indeed paid VAT. In those circumstances Mr McVeigh suggested that the claim for the £24,062.00 could not have been made any sooner than was actually achieved in this case. This Tribunal entertained some reservations about this bearing it in mind that an admission was made that the possibility of a claim had been minuted but not acted upon.

Miss Linklater claimed, on behalf of the Respondents, a sum in respect of interest. She initially mentioned a figure of £4,735.63 but acknowledged that she was unable to confirm that this was the correct figure because, as she explained, it related to a larger figure and she was not then in a position to state what was the correct figure which the Respondents might claim by way of interest.

This Tribunal declined to make any Order in relation to any payment of interest being unable to rule on this claim one way or the other without hearing evidence. If, on reflection, the Respondents wished to pursue such a claim against the Appellants then the Tribunal ruled that they must raise that claim to this Tribunal as presently constituted because it had already heard this case.

In the light of the authority of the judgment of the Court of Appeal in The University of Sussex v The Commissioners of Customs and Excise, this Tribunal ruled unanimously that Regulation 29(1A) applied and they had no alternative but to order that the Appellants' claim for the repayment of £24,062.00 by way of input tax could not be sustained.

Miss Linklater confirmed that the Respondents made no application for costs.

HIS HONOUR JUDGE McKEE QC

CHAIRMAN

RELEASED:09/07/2004

LON/02/0263