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Other cases that caught our eye

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VAT recovery

In Mitteldeutsche Hartstein-Industrie AG v Finanzamt Y (Case C-528/19) (16 September), the CJEU held that a German company was entitled to recover input VAT on the cost of constructing a municipal road to enable it to access and operate a quarry, even though the road was available to the public free of charge. The court also held that the construction of the road was not carried out in return for authorisation to operate the quarry (as a barter transaction), as there was not enough of a link between the authorisation and the roadworks for one to constitute consideration for the other.

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Reasonable excuse

C Stokes and another v HMRC [2020] UKFTT 357 (TC) (8 September) is a comparatively rare example of a tribunal cancelling late return penalties on both reasonable excuse and special circumstances grounds. The taxpayers lived in South Africa and had income from a UK property. They appointed an agent to prepare returns but because of the serious illness of his father the agent failed to remind the taxpayers to submit return information before the filing deadline. That did not give them a reasonable excuse but did amount to special circumstances. Once they had provided information to their agent, the taxpayers kept chasing him to submit the returns: that showed them taking reasonable care. Although not a precedent, the case is a useful reminder that reasonable excuse and special circumstances are different concepts – often they get blurred.

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Permission to appeal out of time refused

R Angel v HMRC [2020] UKFTT 0345 (TC) (29 August): There is nothing new in the case but I mention it here because the judge went out of his way to congratulate HMRC on the way that its representative had organised the voluminous (453 pages) bundle of documents for the hearing. Very often judges criticise HMRC for poor presentation of a case, so it is right to record when praise is given.

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In HMRC v Cheshire Centre for Independent Living [2020] UKUT 275 (TCC) (15 September), the UT allowed the taxpayer's application for costs of its appeal before the FTT, finding that HMRC’s conduct was unreasonable as HMRC had failed to run what turned out to be a winning argument sooner. However, the UT refused the application for costs to be decided on an indemnity basis as HMRC’s conduct was not unreasonable to a high degree or outside of the norm. Therefore, costs should be agreed by the parties taking into account the UT’s suggested discounts.

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Issue: 1502
Categories: Cases