BOLLINWAY PROPERTIES LIMITED v THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS [2023] UKUT 00295 (TCC)
| Jurisdiction | UK Non-devolved |
| Judge | MR JUSTICE RICHARD SMITH JUDGE VINESH MANDALIA |
| Subject Matter | 12 December 2023 |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Published date | 02 January 2024 |
Neutral Citation: [2023] UKUT 00295 (TCC) Case Number: UT/2022/000058
UPPER TRIBUNAL
(Tax and Chancery Chamber) Hearing venue: Rolls Building, London
VAT – REPAYMENT SUPPLEMENT – s.79 VATA 1994 – Purchase of properties - whether
the inquiry by HMRC requesting a full set of backup documents requires more than sales
invoices and purchase document – Yes – Whether it is reasonable to request underlying
documents regarding the ‘chargeable event’, including TR1s – Yes. HMRC inquiries
conducted within the relevant period – regulation 198 and 199 VAT Regulations 1995 – Appeal
dismissed.
Heard on: 07 July 2023
Judgment date: 12 December 2023
Before
MR JUSTICE RICHARD SMITH
JUDGE VINESH MANDALIA
Between
BOLLINWAY PROPERTIES LIMITED Appellant
and
THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS
Respondents
Representation:
For the Appellant: Michael Ripley, counsel, instructed by Nigel Gibbon & Co
For the Respondents: Peter Mantle, counsel, instructed by the General Counsel and Solicitor
to His Majesty’s Revenue and Customs
1
DECISION
INTRODUCTION
1. In a decision released on 2 September 2021, the First-tier Tribunal (Tax Chamber) (‘the
FtT’) dismissed the appeal by Bollinway Properties Limited (“Bollinway”) against the decision
of the respondents (“HMRC”) that a repayment supplement under section 79 of the VAT Act
1994 (“VATA”) in respect of £71,084,816.43 claimed by Bollinway in its VAT return for the
period 10/18 submitted on 2 November 2018, is not payable.
SUMMARY OF THE ISSUES AND DECISION OF THE FTT
2. Bollinway is a property business which forms part of a corporate group owned by
Acepark Limited (“Acepark”). On 10 April 2018, Acepark acquired Toys “R” Us Properties
Limited (“TRUP”) for £1 with a view to maximising the value of its property portfolio. On
17th September 2018, TRUP sold 27 properties to Bollinway.
3. The background to the claim to a repayment supplement made by Bollinway is
uncontroversial and was summarised in paragraphs [2] to [4] of the decision of the FtT:
“2. Bollinway submitted a VAT return for period 10/18 in which a repayment of
£71,170,729.68 was claimed. That amount represented the input tax incurred on
the purchase of a property portfolio (“the Properties”) from Toys “R” Us Properties
Limited (“TRUP”) on 17th September 2018 for the sum of £355,853,648.39 plus
VAT. Bollinway asked the Respondent (“HMRC”) to set-off the amount of its
credit which corresponded to the amount of output tax TRUP would become liable
to pay to HMRC.
3. The sum of £71,084,816.43 was allocated by HMRC to TRUP’s VAT account
on 21st December 2018 and the remaining amount of £85,913.25 was authorised
for repayment to Bollinway on 21st December 2018.
4. Bollinway claims repayment supplement of £3,554,240.82 being 5% of the sum
of the £71,084,816.43 which was credited against TRUP’s liability for the same
amount.
5. In essence, HMRC says that Section 79 is not applicable to the amount set against
TRUP’s VAT liability, but even if it was so applicable, no repayment supplement
was due because HMRC satisfied the rules requiring their inquiries to be conducted
within a “relevant period”. Bollinway says that section 79 applies to the application
of the £71,084,816.43 against TRUP’s liability and the time taken to agree the set-
off exceeded the relevant period so that repayment supplement is due.
4. The FtT concluded, at paragraph [162] of its decision:
(1) Bollinway assigned its right to a VAT credit of £71,084,816.4371 to TRUP;
(2) As a result of the assignment Bollinway was no longer entitled to claim the
repayment supplement under section 79 on the amount of £71,084,816.43;
(3) Even if Bollinway was able to rely on section 79, despite the assignment and
the consequent lack of payment to it, HMRC’s issue of the requisite direction
on 20 December 2018 took place within the relevant period of 30 days from
the submission of the VAT return on 2 November 2018.
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