British Telecommunications PLC v HMRC (No 6)

In British Telecommunications PLC v HMRC (No 6) (Upper Tribunal – 6 August) BT had made a late claim to bad debt relief for the period from 1978 to 1989. HMRC rejected the claim on the basis that the effect of VATA 1994 s 36(4)(b) as originally enacted and prior to its amendment by FA 1997 s 39 was that no relief was due. BT appealed contending that the relevant conditions contravened EC law and should be treated as invalid and ineffective. The Upper Tribunal accepted this contention and allowed the claim holding that the ‘property condition’ of s 36(4)(b) had been incompatible with EC law and the time limit imposed by FA 1997 s 39(5) was invalid as it failed to allow for an adequate transitional period.

Why it matters: The bad debt relief rules were amended in 1997 but this case may still...