In HMRC v Taylor Clark Leisure [2018] UKSC 35 (11 July 2018), the Supreme Court held that TCL could not be considered as having made claims within the FA 2008 s 121 time limit, by relying on the fact that another company of the group had made the claims.
Between 1973 and 2009, TCL was the representative member of the Taylor Clark VAT group, and is now dormant. In 1990, the group’s bingo business (which was the object of the appeal) was transferred to a group company called Carlton. In 1998, Carlton was sold out of the group. In November 2007 (in anticipation of the decision of the House of Lords in Fleming [2008] 1 WLR 195), Carlton submitted four repayment claims under VATA 1994 s 80, which TCL, as representative member of the VAT group, had accounted for in the years between 1973 and 1998. TCL submitted that it was entitled to rely on Carlton’s claims, as representative member of the group, because those claims should be regarded as having been submitted on behalf of the VAT group, which should be treated as a single taxable person.
The issue was therefore whether TCL should be treated as having made the claims for repayment within the time limit of FA 2008 s 121 (31 March 2009). The Supreme Court observed that s 80(1) provides that HMRC’s liability to credit or repay overpaid output tax is owed to the person who has accounted for the VAT in the relevant accounting period or periods. The court therefore considered that where there have been overpayments of VAT by the representative member of a VAT group, the person entitled to submit a claim during the currency of a VAT group, unless the claim has been assigned, is either the current representative member of the VAT group or a person acting as agent of that representative member.
The court also noted that Carlton had sent the letters to HMRC on its own letterhead, at a time when it was no longer a member of the VAT group and without claiming to be acting as TCL’s agent. Furthermore, the court accepted the FTT’s finding that TCL had ‘neither instructed nor authorised’ Carlton to act on its behalf.
Finally, the court observed that there was ‘no need to complicate matters by introducing a concept of the VAT group as a quasi-persona in an analysis of the UK legislation’. The representative member was the legal person, which was the taxable person.
Why it matters: Several companies had sought to intervene in this appeal because its determination was likely to affect their outstanding claims due to be heard by the Court of Appeal in January 2019. The Supreme Court declined their intervention on the ground that the appeal was not directly concerned with the same issues. These turned on the identification of the company entitled to make a claim for repayment when the company which has had the economic burden of paying VAT has left the VAT group or where a VAT group has been dissolved. The Supreme Court acknowledged nonetheless that its decision would have a bearing on those issues.
Also reported this week:
A Scott v HMRC - Operating corresponding deficiency relief
In HMRC v Taylor Clark Leisure [2018] UKSC 35 (11 July 2018), the Supreme Court held that TCL could not be considered as having made claims within the FA 2008 s 121 time limit, by relying on the fact that another company of the group had made the claims.
Between 1973 and 2009, TCL was the representative member of the Taylor Clark VAT group, and is now dormant. In 1990, the group’s bingo business (which was the object of the appeal) was transferred to a group company called Carlton. In 1998, Carlton was sold out of the group. In November 2007 (in anticipation of the decision of the House of Lords in Fleming [2008] 1 WLR 195), Carlton submitted four repayment claims under VATA 1994 s 80, which TCL, as representative member of the VAT group, had accounted for in the years between 1973 and 1998. TCL submitted that it was entitled to rely on Carlton’s claims, as representative member of the group, because those claims should be regarded as having been submitted on behalf of the VAT group, which should be treated as a single taxable person.
The issue was therefore whether TCL should be treated as having made the claims for repayment within the time limit of FA 2008 s 121 (31 March 2009). The Supreme Court observed that s 80(1) provides that HMRC’s liability to credit or repay overpaid output tax is owed to the person who has accounted for the VAT in the relevant accounting period or periods. The court therefore considered that where there have been overpayments of VAT by the representative member of a VAT group, the person entitled to submit a claim during the currency of a VAT group, unless the claim has been assigned, is either the current representative member of the VAT group or a person acting as agent of that representative member.
The court also noted that Carlton had sent the letters to HMRC on its own letterhead, at a time when it was no longer a member of the VAT group and without claiming to be acting as TCL’s agent. Furthermore, the court accepted the FTT’s finding that TCL had ‘neither instructed nor authorised’ Carlton to act on its behalf.
Finally, the court observed that there was ‘no need to complicate matters by introducing a concept of the VAT group as a quasi-persona in an analysis of the UK legislation’. The representative member was the legal person, which was the taxable person.
Why it matters: Several companies had sought to intervene in this appeal because its determination was likely to affect their outstanding claims due to be heard by the Court of Appeal in January 2019. The Supreme Court declined their intervention on the ground that the appeal was not directly concerned with the same issues. These turned on the identification of the company entitled to make a claim for repayment when the company which has had the economic burden of paying VAT has left the VAT group or where a VAT group has been dissolved. The Supreme Court acknowledged nonetheless that its decision would have a bearing on those issues.
Also reported this week:
A Scott v HMRC - Operating corresponding deficiency relief
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