VAT: Bratt Auto Services Ltd and Bratt Auto Contracts Ltd - Upper Tribunal decision

VAT: Bratt Auto Services Ltd and Bratt Auto Contracts

The UT has released its decision in this case concerning Fleming claims for overpaid output VAT submitted by two taxpayers

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The dispute concerns Fleming claims for overpaid output VAT submitted by two taxpayers. They were submitted on the Fleming deadline of 30 March 2009 under a single letter. There were four claims with both taxpayers attempting to make Italian Republic claims and Elida Gibbs claims. The issue is whether the claims met the requirements under Regulation 37 of the VAT Regulations. The FTT allowed the taxpayer’s appeal on one claim. The UT has allowed HMRC’s appeal on this claim and dismissing the taxpayer’s appeal on the other 3. This essentially means that the UT has concluded that none of the claims are valid. 

In the absence of an amount, the earlier FTT dismissed three of the appeals. Only one claim, Bratt Auto Services Ltd’s (BAS) Elida Gibbs claim included an amount, a claim for £1.29m based on the accounts for the year ending 31 December 1989. The earlier FTT allowed this claim on the basis that it did state an amount, set out the method and referred to the accounts which supported the calculation and therefore the Regulation 37 conditions were met. The FTT added that with respect to the older periods, when the further information is provided this will not be a new claim but an amendment of the original claim (and therefore not time barred). The parties appealed.

The UT began by considering the taxpayer’s arguments that the claims complied sufficiently with a purposive application of the statutory provisions. Taking s80 and Regulation 37 together, the UT concluded that a claim cannot be made without an amount or the method of calculation. Therefore, agreeing with the FTT, the taxpayer’s claims with no value given were not valid. The taxpayer’s appeals were therefore dismissed. 

Turning to HMRC’s appeal on the claim where a single annual value was given, the UT considered that s80(1) and (2) require that for a valid claim the amounts must relate to specific accounting periods. The Judge accepted that it was not always possible to precisely calculate a claim and had no objection to an annual claim being equally split into VAT periods across the year. Whilst acknowledging this may seem pedantic the purpose of allocation to accounting periods is important in terms of time limits and interest. HMRC’s appeal was allowed. To access the decision click here.


For further information please contact :

Karen Killington 

Steve Powell

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