VAT focus: Tribunal upholds cap for post-Fleming claims

In Leeds City Council v HMRC [2013] UKUT 596, the Upper Tribunal has held that the three-year cap on VAT reclaims can validly be applied to overpayments of VAT made post-4 December 2006. The tribunal rejected the taxpayer’s arguments that the manner in which the three-year cap was introduced breached the EU principles of legal certainty, proportionality, equivalence, legitimate expectation and the right to an effective remedy, as regards the recovery of overpayments of VAT made after it was introduced. The case is relevant to the many taxpayers who have protected Scottish Equitable claims behind this litigation